Congress also passed an act on February 16, 1865, making a grant to the Pacific Mail Steamship Company for operating ships to the Orient. The contract expired in 1877, and the company having received four and one half million dollars, the agreement was not renewed.

No further attempt was made to aid shipping until 1891, when Congress passed another act authorizing the Postmaster General to make contracts for from five to ten years for the carriage of the mails. The contracts were open to competitive bidding, and the maximum was fixed at a price which would give more than a payment for services actually rendered to the government. The Postmaster General has made six contracts, and the act, known as the Postal-Aid Law, is still in effect.

On December 19, 1898, Senator Hanna introduced the Hanna-Payne Bill, which aimed to subsidize shipping generally and not simply mail carriers, according to tonnage, speed, and distance covered. It soon became evident that the bill could not pass, and it was not put to a vote. A similar bill met the same fate in the next Congress.

Senator Frye introduced another general subsidy bill in the Fifty-Seventh Congress, and succeeded in having the same favorably

reported and passed in the Senate, but it was not voted upon in the House of Representatives.

A bill drawn upon lines suggested by the majority of the Merchant Marine Commission is now pending before Congress. This bill increases the subvention to the Oceanic Line running from the Pacific coast to Australasia, and establishes thirteen new contract mail lines. It also grants a subsidy, terming it a subvention, of five dollars per gross ton to all vessels engaged in foreign trade by sea, or the deep-sea fisheries for twelve months. There is also a provision levying a tonnage duty of sixteen cents per net ton on vessels from foreign ports, but stipulating that American vessels may obtain a rebate of eighty per cent by employing an American boy for each one thousand tons of their tonnage.

As was expected this bill, strengthened by the report of the Merchant Marine Commission, met with little opposition in the Senate and passed that body on February 14, 1906. It has, however, not yet been under consideration in the House, and it is more than doubtful whether it will become a law at this session. The Speaker is opposed to it because he is desirous of keeping down appropriations as much as possible. The House of Repre

1 March, 1906.

sentatives is much nearer the people than the Senate, and will certainly consider the matter with care before passing a measure giving direct grants to special interests, without any service being rendered in return, a step almost sure to meet with popular disapproval.

C. EFFECT OF LEGISLATION UPON TONNAGE 1. In Coastwise Trade

It is always difficult to generalize from statistics, as to the effects of legislative enactments. There is too often an unwarranted emphasis placed upon the effect of legislative enactments, as against economic conditions, since the former are evident upon the pages of the statute books, while the latter are frequently little understood.

The effect of the act of 1789, reënacted in 1792, however, is evident. It gave a monopoly to American vessels in the coastwise trade, and we have seen our tonnage increase from 68,607 tons in 1789 to 5,441,688 in 1905. This vast body of shipping has been saved to us, and on the whole the policy inaugurated in the coastwise trade, while of course inapplicable to the foreign trade, seems to have been a wise one in view of our present protective tariff policy as to other industries.

2. In Foreign Trade

Nothing can be deduced from the various colonial regulations. They were frequently aimed as much at neighboring colonies in America as against foreign countries, were not at all uniform, and were often evaded. These measures were very largely passed simply in retaliation.

The effects of the various acts of 1789 were decidedly marked. In 1789 Great Britain's tonnage arrivals in our ports amounted to 212,544 tons, while in 1796, seven years later, her arrivals had fallen to 19,699. In 1789 American tonnage was 128,893, carrying 17.5 per cent of our imports and 30 per cent of our exports, while in 1796 it had increased to 576,733 tons, carrying 94 per cent of our imports and 90 per cent of our exports. This growth was little short of marvelous, and making due allowance for the fact that capital and labor then naturally turned to the sea, and also for the Napoleonic wars, a large part of this increase must be ascribed to the legislation in force.

The provision of the act of 1789, reënacted in 1792, relative to the registration of vessels, was in harmony with the then existing policy which was to protect both shipowner and shipbuilder. While the United States was building

very cheap ships and was protecting them against foreign competition, forbidding registry to foreign-built ships had some foundation in reason. But with the withdrawal of protection to the shipowner, and the acquirement by foreigners of the advantage in cost of ship construction, should have come an abandonment of the policy of limiting registration to American-built ships.

Up to 1815 our shipping was fully protected, and throve except as affected by the War of 1812. From the end of this war until 1826 growth was rapid, and in 1826 American shipping reached its maximum, for in that year American vessels carried 95 per cent of our imports and 89.6 per cent of our exports, a percentage never equaled before or since. This was during a time of partial reciprocity, but up to this time only Great Britain, France, and Sweden and Norway had accepted our offer of reciprocity. Our contest with Great Britain, our greatest rival, and the measures of 1818 and 1820 prevented actual reciprocity with her, so that it was not until 1830 that full reciprocity with Great Britain began. In that year British arrivals were 100,298 tons, in the next year 239,502 tons, and her arrivals have been on the increase ever since.

The adoption of full reciprocity in the direct and indirect trades seems to the writer