In the Senate the bill fared well as a whole. Like the original bill it came back from the committee on commerce amended, though slightly, and with a minority report against it: the minority again emphasizing their "unqualified opposition to this renewed effort to donate to certain favored interests moneys collected by the Government for public purposes under its power of taxation."^[IA] It was closely fought by the opposition in debate, opened with Senator Gallinger's argument in its behalf on January 8, 1906. But it successfully ran the gauntlet. Further amended in several particulars, but unscathed in its essential parts, it passed the Senate, February 14, by a vote of 38 to 27, five Republican Senators and all the Democrats voting in the negative.^[IB]

In the House its progress was less prosperous. It lay with the committee on merchant marine and fisheries into the second session of this Congress; and more hearings were given. Reframed after the enacting clause, but practically the same in principle, it was reported back January 19 (1907) by Mr. Grosvenor, accompanied by an explanatory report of the majority of the committee;^[IC] and bill and report were referred to the whole House on the state of the Union. Later the views of the minority were filed.^[IC] On January 23 a message from President Roosevelt in behalf of the measure was received. The president particularly urged the "great desirability of enacting legislation to help American shipping and American trade by encouraging the building and running of lines of large and swift steamers to South America and the Orient." As striking evidence of the "urgent need of our country's making an effort to do something like its share of its own carrying trade on the ocean," he directed attention to the address of Secretary Root before the Trans-Mississippi Commercial Congress at Kansas City, Mo., the previous November, giving the results of the secretary's experiences on his recent South American tour. The proposed law, Mr. Roosevelt repeated, was in no sense experimental. It was "based on the best and most successful precedents, as for instance on the recent Cunard contract with the British Government." So far as South America was concerned, its aim was to "provide from the Atlantic and Pacific coasts better American lines to the great ports of South America than the present European lines." Under it "our trade friendship" would "be made evident to the South American Republics."^[ID]

Backed by the explanatory report and this message, the friends of the measure opened the debate, February 25, Mr. Grosvenor leading. It was a great debate, long and hot. Numerous amendments were put in; some changing the proposed routes, others adding new ones. At length on March 1, three days before the end of this Congress, the much amended bill was passed, and went back to the Senate for concurrence.^[IE]

As it now stood it was shorn of the provisions for lines from the Pacific coast to Japan, China, the Philippines, and Australasia. The new subsidized lines were all to run to South America. Two of these were to run from the Atlantic coast to Brazil and Argentina, respectively; one, from the Pacific coast to Peru and Chile; and one from the Gulf of Mexico to Brazil. On all four lines sixteen-knot steamers were required, with speed on the average above the European mail lines to South America. The subsidies were reserved exclusively to ships to be built in the United States, so that the mail service could not be performed by existing steamers; thus a wholly new ocean-mail fleet was guaranteed.^[IF]

The bill was reached in the Senate March 2, and strenuous efforts were made by Senator Gallinger and others to push it through. But it failed in the closing hours of the session to reach a vote. So this measure fell.^[IG]

Another effort was made in the Sixtieth Congress. In his message at the beginning of this Congress (December 2, 1907) President Roosevelt recommended an amendment to the act of March 3, 1891, "which shall authorize the postmaster-general in his discretion to enter into contracts for the transportation of mails to the Republics of South America, to Asia, the Philippines, and Australia at a rate not to exceed four dollars a mile for steamships of sixteen-knots speed or upward, subject to the restrictions and obligations" of that act. In other words, to give the same subsidy to steamers in these services as allowed to the twenty-knot American mail transatlantic line, instead of two dollars a mile.^[IH] A bill to this effect was introduced in the Senate December 4^[II]; on February 3, 1908, was reported back from the committee on commerce so amended as to provide the four-dollar-a-mile subsidy to American sixteen-knot steamers on routes of four thousand miles or more to South America, the Philippines, Japan, China, and Australasia; was debated at length; further amended; and finally, passed, March 20. In the House it was referred to the committee on post office and post roads;^[IJ] issued therefrom in a dew draft;^[IK] debated; and finally failed to pass. Thereupon the subsidized service to Australia by way of Honolulu and the Samoan group was abandoned.

Again the measure was pressed in the Sixty-first Congress. It now had the backing of President Taft. In his annual message December 9, 1909, "following," as he graciously said, "the course of my distinguished predecessor," he earnestly recommended the passage of a "ship-subsidy bill looking to the establishment of lines between our Atlantic seaboard and the eastern coast of South America, China, Japan, and the Philippines." The bill, as introduced by Senator Gallinger (February 23, 1910), provided for subsidized lines of the second and third classes on routes to the points named by Mr. Taft, four thousand miles or more in length outward voyage, or on routes to the Isthmus of Panama: the second class to receive the subsidy rate per mile provided in the law of 1891 for steamers of the first class, and the third class the rate applicable to the second class. If no contract should be made for a line between a Southern port and South American ports, and two or more should be established from Northern Atlantic ports, it was required that one of the latter should touch outward and homeward at two ports of call south of Cape Charles. The total expenditure for foreign mail-service in any one year was limited—not to exceed the estimated revenue therefrom for that year.^[IL]

The bill came back from the committee on commerce in March without amendment, and with a report.^[IM] In June it was put over for consideration in December of the third session of this Congress. When at length it was reached, Senator Gallinger submitted a substitute. This, instead of naming the points to be covered, provided for subsidized routes to South America south of the equator outward voyage; provided for one port of call instead of two on the Southern Atlantic coast; guarded against "discrimination detrimental to the public interest," in other words "combines," by a provision that no contract be awarded to any bidder engaged in any competitive transportation business by rail, or in the business of exporting or importing on his own account, or bidding for or in the interest of any person or corporation engaged in such business, or having control thereof through stock ownership or otherwise; and fixed the limit of the total expenditure for foreign mail service in any one year at four million dollars. This substitute was finally passed on February 12, 1911, by a vote of 39 to 39, the chairman casting his vote in the affirmative. In the House the measure went to the committee on post office and post roads; and there rested.

CHAPTER XIV

Norway: State contributions; trade subsidies.

The United States confines the coastwise trade to American ships, and these are exempted from tonnage dues. It excludes foreign-built ships from American registry, admitting only American ships, or those taken in war as prizes or forfeited for a breach of United States laws, belonging to American citizens.^[IN] Ownership of American ships is restricted to "citizens of the United States, or a corporation organized under the laws of any of the States thereof."^[IO] The master of an American ship, and all officers in charge of a watch, including the pilots, must be American citizens. Since 1871 foreign materials for ship-building have been admitted free of duty. Since 1909 such materials, and all articles necessary for the outfit and equipment of ships, have been duty-free, with this proviso: that vessels receiving these rebates of duties "shall not be allowed to engage in the coastwise trade of the United States more than six months in any one year," except upon repayment of the duties remitted; and that vessels built for foreign account and ownership shall not engage in this trade.^[IP]

In 1910 the subsidized American service covered only the one transatlantic line from New York to Southampton, calling at Plymouth and Cherbourg; lines to the north coast of South America—to Venezuela; to Mexico; to Havana; to Jamaica; and on the Pacific, from San Francisco to Tahiti.

The total cost of the service for the year on these seven subsidized routes was $1,114,603.47, a net excess over the amount allowable at present rates to steamers not under contract of $346,677.39, or, deducting the amount would have been paid non-contract steamers for the despatch of the foreign closed mails which these steamers carry without additional cost to the department, a total excess of $293,013.40.^[IQ] "All other mail service between the United States and foreign countries," the postmaster-general regretfully reported, is "wholly dependent on steamships over whose sailings the department has no control."^[IR]

The total tonnage of the United States in 1910 as given by Lloyd's was 5,058,678 tons:

The number of ships on the lakes as given does not include wooden vessels trading on the Great Lakes. While the ocean tonnage has declined from more than two and a half million tons in 1861 to some eight hundred thousand tons, that engaged in the coastwise and inland trade has steadily increased for many years.^[IS] On the Great Lakes especially is employed a fine and powerful merchant fleet.

THE END.

FOOTNOTES: