at a given port, to require the railroad to enter into the same arrangements with other steamship lines.

PRESENT POLICY REGARDING COASTWISE SHIPPING

1

The present policy of the United States concerning the coastwise and Great Lakes merchant marine is largely as it was before 1909-10. It has, however, changed in various respects:

1. The exclusion of foreign-built vessels from the domestic trade is continued, in the main, but was modified by the Shipping Act of September 7, 1916, so far as concerns foreignbuilt vessels acquired from the United States Shipping Board and documented under the American flag, or foreign-built vessels operated by corporations in which the United States is a stockholder. Section nine of the act provides that

Foreign-built vessels admitted to American registry or enrollment and licensed under this Act, and vessels owned, chartered, or leased by any corporation in which the United States is a stockholder, and vessels sold, leased, or chartered to any person a citizen of the United States, as provided in this Act, may engage in the coastwise trade of the United States.

2. Indirect aid is given shipping by appropriations for rivers and harbors, also by laws to make navigation safer, and by the activities of administrative bureaus for the promotion of commerce. This indirect assistance has been gradually enlarged.

3. The navigation laws concerning the welfare of crews and the safety of vessels at sea have been made more detailed and stringent.

4. The government ship-purchase plan, although intended primarily to provide vessels for the foreign trade, applies also to coastwise shipping. The vessels acquired may be operated either in the foreign or in the coastwise trade.

5. The charges and services of coastwise and Great Lakes carriers, and the relations between them and with the rail

1 Since writing this the coastwise trade has been temporarily opened to foreign vessels as a war measure, by act of October 6, 1917.

roads, are regulated both by the Interstate Commerce Act as amended, and by the United States Shipping Act, coastwise and Great Lakes carriers being regulated to a greater extent than are ocean carriers engaged in the foreign trade.

Most of the provisions of the laws regulating carriers by water tend to protect the shipper, but some of the provisions may prove to be of benefit to the carriers. In addition to the provisions cited above in connection with the foreign trade, mention may be made of those that prohibit the raising of a railroad rate that was reduced with a view to eliminating water competition, unless the Interstate Commerce Commission is convinced that the advance is justified by other changed conditions. A similar provision of the United States Shipping Act concerns rates reduced by a coastwise or Great Lakes carrier in competition with another, the Shipping Board in this case, instead of the Interstate Commerce Commission, acting as the administrative body. The Interstate Commerce Commission, by the Panama Canal Act of 1912, was authorized to order and supervise the making of physical connection between rail and water carriers. The provisions of the Panama Canal Act prohibiting the control or ownership of water carriers by railroads under certain prescribed conditions were also intended for the promotion of the coastwise and Great Lakes merchant marine, but it is doubtful whether they will accomplish their purpose.

PRESENT POLICY REGARDING SHIPBUILDING

During recent years the government's methods of promoting the shipbuilding industry have changed in four respects:

1. The policy of "free shipping" that was adopted for the foreign trade in 1912 and 1914 deprives American shipyards of the substantial monopoly that they held under former laws, which, with certain exceptions, limited American registry for the foreign trade to vessels built in the United States. The free shipping policy in the foreign trade is commendable, because it removes an objectionable restriction upon the shipping

industry without really injuring American shipyards. For many years prior to the present war practically no vessels for the foreign trade were constructed in the United States.

2. The shipbuilding industry continues to be aided by the navigation law of 1817, which restricts the coastwise and Great Lakes trade to.American-built vessels. The policy was, however, modified in the United States Shipping Act of 1916 to the extent that foreign-built vessels acquired from the Shipping Board and documented under the United States flag or operated by corporations in which the United States is a stockholder may be operated in the coastwise trade.1

3. The policy of exempting shipbuilding materials from the payment of import duties has been extended. Before 1909 vessels built with materials imported free of duty could not engage in the coastwise trade longer than two months annually; but in 1909 the time for participating in the coastwise trade was extended to six months; and in 1912 this restriction was completely removed. The policy of exempting shipbuilding materials from import duties was adopted in full in the Panama Canal Act of 1912, section five providing that—

All materials of foreign production which may be necessary for the construction or repair of vessels built in the United States and all such materials necessary for the building or repair of their machinery and all articles necessary for their outfit and equipment may be imported into the United States free of duty under such regulations as the Secretary of the Treasury may prescribe.

The Tariff Act of 1913 retained this general principle, but so modified it that materials for the repair of foreign ships in American shipyards and of American vessels in the coastwise trade remain subject to duty.

4. The shipbuilding industry continues to be aided by the naval program, which each year provides shipyards with profitable orders for naval and other public vessels, even though some are also being constructed in United States navy yards. At the present writing [1917] the shipbuilding industry is being greatly aided by government orders for a large 1 See footnote, p. 427.

number of merchant vessels to meet the tonnage needs created by the war. The act of September 7, 1916, instructs the United States Shipping Board to investigate, and to report upon, the relative cost of building merchant vessels in the United States and foreign countries, and to make recommendations to Congress as to future legislation.

REFERENCES

The

Academy of Political Science in the City of New York. American Mercantile Marine (in Proceedings of the Academy, VII, No. 1, October, 1915).

BATES, W. A. American Marine: Shipping Question in History and Politics (1913).

American Navigation (1902).

HOUGH, B. O. Ocean Traffic and Trade, chap. x (1914).

JOHNSON and COLLABORATORS. History of Domestic and Foreign Commerce of the United States, II, chap. xxxix (by D. S. Hanchett, 1915).

KEILER, H. American Shipping, Its History and Economic Conditions (Jena, 1913).

MEEKER, R. History of Shipping Subsidies (1905).

RENNINGER, W. D. Government Policy in Aid of American Shipbuilding (1911).

SOLEY, J. R. "The Maritime Industries of the United States," in The United States of America, I (by N. S. Shaler, 1894). United States (Bureau of Foreign and Domestic Commerce). Government Aid to Merchant Shipping, pp. 137-44 (by G. M. Jones, 1916).

(Commissioner of Navigation). Reports (annual).

(Congress). Committee on Commerce, Promotion of Foreign Commerce of the United States by Providing Adequate Shipping Facilities (Senate Rept. No. 841, 63 Cong., 3 sess., 1915). Committee on the Merchant Marine and Fisheries, Hearings on H. R. 10,500 (64 Cong., 1 sess., February 10March 9, 1916).

-(Merchant Marine Commission). Report (3 vols., 1905).

CHAPTER XXIX

CONDITION OF THE AMERICAN SHIPBUILDING INDUSTRY

Statistics of past and present shipbuilding in the United States, 432. Shipbuilding since beginning of war in Europe, 433. Causes of unfavorable conditions after the Civil War, 434. Relative cost of American and foreign-built vessels, 435. Causes for higher shipbuilding cost in the United States, 436. Fluctuations in prices of steel, 437. Recent coöperation of steel and shipbuilding industries, 439. Labor costs, 439. Large-scale production in foreign countries, 440. Standardization abroad, 441. Present conditions and future prospects, 442. Future prospects improving, 443. Construction bounties undesirable, 444. What the government should do for American shipyards, 445. References, 446.

THE shipbuilding industry is one of the oldest in the United States. Many prosperous shipyards flourished in New England and in New York from early colonial days, and, from a somewhat later date, in Philadelphia, until after the Civil War. There was an abundance of suitable timber for building wooden sailing vessels; an adequate supply of labor was available; standardized types of sailing vessels known throughout the world were developed; and there was a large demand for American vessels, principally among American shipowners, but to some extent also abroad. Shipbuilding and shipowners were very closely affiliated. Many vessel owners were financially interested in shipyards; shipyard properties at times constructed vessels for themselves or retained an interest in them; and in off-seasons sailors were employed as workmen in shipyards.

The shipbuilding industry in the United States has developed largely in accordance with the progress of our mercantile and naval marines. Until the Civil War our merchant marine was large, and increased year by year, and the American ship