IF ships under the American flag are ever again to obtain any share of the deep-water carrying-trade of the world, it is of the utmost importance that the American people should learn first of all why American ships lost the trade they once enjoyed.
To enable us to comprehend the reasons for the decadence of our merchant marine it is necessary to have well in mind the fact that we obtained our supremacy by actual merit. It was an economic development, not the result of any kind of political or other stimulation. We did not gain or hold supremacy because we could build ships cheaper than they could be built elsewhere. Cheaper ships could be had in the north of Europe and in Canada. Moreover our most profitable ships were those that cost the most per ton. The American ships were supreme, too, rather because the wages paid were higher then in spite of that seeming handicap. In short, the whole environment of the American seafaring population had evolved a ship and crew which, taken together as a unit, were able to give more ton-miles for a dollar than any other similar unit in the world.
At first the advent of steamships changed these conditions in but one respect; it gave greater regularity of passage. The swiftest sailing ships could cross the Atlantic, now and then, in as short a time as the steamer, and they carried more cargo at the same time. But the steamer instantly commanded the cream of the traffic, and received higher rates for it, because the merchant could calculate, within a day, the time required for the passage. The time of even the swiftest of sailing ships was sometimes extended by adverse winds to fifty or sixty days.
This is to say that even the first crude steamships took the best of the trade because they were more efficient.
With the inevitable improvements in steamships came an encroachment upon the cheaper traffic that had been carried on sailing ships, and the most important of these improvements was made when the screw propeller was adopted.
Stevens had driven a small boat with screws before Fulton built the Clermont, but John Ericsson, a Swede, was the first to develop screw propulsion in a practical manner. His first work was done in England, where he built a screw steamer 45 feet long with which he made a speed (April, 1837) of ten miles an hour on the Thames. Then he towed the American packet ship Toronto at a speed of four and a half miles an hour. On July 7, 1838, an iron vessel 70 feet long by 10 wide, and having a draft of 6 feet 9 inches, named the Robert F. Stockton, was launched at Laird & Co.'s yard, Birkenhead, England, for Captain Robert F. Stockton, U. S. N. It was fitted with an engine and an Ericsson screw. It was then brought to America under sail, and set to work under steam as a tug on the Delaware River, where it earned much money for many years.
In 1839 Ericsson came to the United States and built the screw steamship Princeton for our navy, the first warship of the kind in commission.
In the meantime Francis P. Smith, an English farmer, was developing screw propulsion, and succeeded in convincing the Admiralty that the screw was a practical device, with the result that many experiments were tried and the screw was much improved.
In introducing the screw, two difficulties were encountered. The engines of the day gave only about twenty-five revolutions to the minute, and it was therefore necessary to introduce some sort of multiple gearing between the engine-shaft and the screw shaft; for a screw should turn at seventy-five times a minute, or more. The other defect of screw propulsion was found in the strain of the shaft upon the stern of the ship. No combination of timbers in a wooden ship could resist that strain for any great length of time. To the English, however, this was a matter of no moment, for iron had already been used for building hulls. The first of these iron ships was the Aaron Manby, launched in London, in 1820, but the iron ship that first really influenced the British merchant marine was the Great Britain, built for the Great Western Steamship Company at Bristol, in 1843. She was a big ship for her day (322 feet long), and she was not only a profitable cargo carrier, but, having been stranded on the coast of Ireland, she endured the poundings of the storms of an entire winter, and was then hauled off, repaired at small expense (considering the storms she had endured), and when put at work again was found to be as serviceable as ever.
As the Great Britain was driven by a screw the use of iron screw ships soon became fashionable in the British merchant marine, and the more rapidly because they were much more economical in the use of coal.
Lindsay (History of Merchant Shipping) says that the repeal of the ancient British navigation laws helped to turn British merchants to the screw steamer. They were unable to compete with the Americans in the use of sails, and had to take up the new ship or abandon the sea. The Cunard Company would have adopted iron ships promptly but for the contract with the Admiralty. The naval officers supposed that wooden walls were better for keeping out shot than iron, and it was not until 1855, as noted, that this company was allowed to use the best material. The fact that a subsidy thus restrained enterprise seems important here.
For a number of years the iron screw steamer had small effect upon the transatlantic trade. The owners of the sailing packets were making as much money as ever—perhaps more than ever, for they were building larger ships. In 1850, however, William Inman, an Englishman who had been interested in sailing ships, put on a line of iron screw packets between Liverpool and Philadelphia, as noted, and that line sealed the doom of the sailing packet. For the Collins, the Bremen, and the Cunard lines had taken, or were to take, only the cabin passengers and the express freight from the sailing packets, while Inman was after the steerage passengers and the coarser freight. The emigrants were all travelling from Europe to America. The greater part, in bulk, of the freight carried across the Atlantic travelled from America to Europe. Inman filled his ships with emigrants bound west, and with coarse freight bound east. Having a cargo both ways is a most important feature of successful navigation. Inman made money from the first voyage, and he did so without a penny of subsidy. The City of Manchester, of his line, made a net profit of 40 per cent the first year.
For the sake of emphasis let it be said that our transatlantic sailing packets lost their trade, not because the Cunard Company received a subsidy, and not because Collins lost the subsidy he had been receiving, but because of the evolution of a cargo carrier that was far more efficient than the American ship of the sail at its best. And the Collins and Bremen lines were beaten because they, too, were much less efficient than their competitors.
The reader may now ask why the American ship-owner did not adopt the iron screw steamer. A brief review of the conditions will answer the question. He could secure all the capital he needed for the well-tried sailing ship, but no one would advance money for what seemed to be, then, an experiment with a curious device not yet well tried out. Almost incredible as the statement may seem now, the most influential American ship-owners, during the years before the Civil War, refused to have anything to do with the screw propeller. In an essay on "Screw Propulsion in the United States," read before the American Society of Naval Architects and Marine Engineers, at a meeting held in New York in November, 1909, Mr. Charles H. Cramp, vice-president of the Society, said (see Shipping Illustrated, November 20, 1909):—
"The supremacy of British propulsion practically began with the advent of the fine screw steamship Great Britain in 1844, but New York interests would not consider any other than the paddle-wheel, with its walking-beam engine; and as they knew nothing of any other type, they loudly and persistently proclaimed its superiority over all other types, and carried with them the ship-owners, shipbuilders, shipping men, mariners, and all others in general, and the screw propeller was sneered at by them."
Mr. Cramp, having been a shipbuilder in Philadelphia during the period considered, spoke from personal knowledge.
Of equal interest is the state of the iron trade in America at that time. The clippers that were the pride of the nation were bolted together with British iron. All the large castings used in the Collins steamers were imported from England. In his essay quoted above, Mr. Cramp had this to say on iron ship-building:—
"A short time after iron construction was introduced abroad, certain engine builders here commenced iron construction. The first one in America was built in Kensington at the boiler works of Jesse Starr, several squares from the water, and was hauled down there by a large number of horses and then launched.... The first iron steamers here were fearful specimens of naval architecture; the workmen were the boiler-makers of the works, and the vessels were looked on by these engine-builders as merely exaggerated boilers. At first they employed commonplace shipwrights to do certain woodwork that the vessel needed. The British soon began to build the entire ship complete by first-class ship-builders, and the finest specimens of war-ships and merchant ships were turned out by them. In this country iron ships were built with their engines by the boiler-makers and machinists with the most indifferent results."
Said John Roach, a most noted ship-builder, in testifying before the committee of Congress that investigated the state of American shipping in 1869 (H. R. Rep. 28, 41 Cong. 2 sess.):—
"The high cost of iron, produced by the tariff upon it, was one of the principal difficulties that our commerce had to contend with.... If Congress will take off all the duties from American iron, reducing it to the price of foreign iron, then we are prepared to compete with foreign ship-builders. The labor question is misstated. We are prepared to meet that difficulty, and to ask no further legislation upon the subject."
The tariff was not as high before the war as it was after, but the inability of the American ship-builder to obtain iron at home for any purpose at a living price had great influence in preventing the adoption of iron screw steamers.
Of the influence of lack of experience in building sea-going steamships, something more must be said here, and leading authorities of the period shall tell the facts:—
"Hitherto our steamboats have been built for short and comparatively unstormy voyages. The navigation of the Atlantic is quite a different affair from that of the Hudson or the Erie. Now in England they have had the practical experience of thirty-six years in building sea-going steamers." (Scientific American, October 7, 1848.)
Charles H. Cramp, another noted ship-builder, when testifying before the committee of Congress mentioned above said:—
"Great Britain now had the advantage of this country in the carrying trade of the world, not because the vessels constructed were superior to ours in model, but because of the great superiority of their marine engines. The English have built the finest and best marine engines in the world. We have always been inferior to her in that respect."
Senator Rusk, of Texas, who was chairman of the Senate "Committee on the Post Office and the Post Roads," in the course of a report made to the Senate under date of June 15, 1852, described at some length the difficulties under which the Collins Line was then laboring in spite of the subsidy it was receiving. In laying special stress upon the expense of running these ships he said that it was in part due to "the well-known fact that, at the period when they were commenced, there were no machine shops in this country in which castings of the size required could be made, nor were there on this side of the Atlantic, experienced practical engineers competent to take charge of marine engines of such immense size.... It is not to be supposed that engines of such vast dimensions could have been constructed in a country where there were, as yet, no workshops adapted to the purpose and where labor is very high, as cheaply as in a country where every appliance of the kind already existed and where the prices of labor are proverbially low. Nor can it be reasonably imagined that vessels of this description could have been navigated upon as good terms by men taken from this country." (Sen. Rep. Com. 267, 32 Cong. 1 sess. pp. 3-4).
That the iron screw steamer was steadily driving all American ships from the sea, was plainly seen several years before the war, and sufficient warnings were printed in the periodicals of the day. Said the Scientific American on May 16, 1857:—
"There are no less than thirty steamships now running between New York and different ports in Europe. These are regular steamers carrying passengers and merchandise, beside which there are a number of transient ones that carry cargo only. But ten of them are American vessels, while the Boston, Portland, and Philadelphia lines are entirely European. The Atlantic trade is departing from us, and unless our shipping merchants exhibit more practical wisdom and enterprise they will ultimately be vanished in this contest. The whole number of steamships engaged upon the routes between Philadelphia, New York, Boston, Portland, Halifax, and Quebec, on this side of the Atlantic and the ports of Havre, Bremen, Hamburg, Southampton, London, Liverpool, and Glasgow, on the other side, is fifty-one. Of these only seventeen have paddle-wheels: all the others—thirty-four—are screw propellers with iron hulls. They are the most economical of steamships; their steam power is but small in proportion to their tonnage; they make very regular and quick passages, carry large cargoes, charge but little more freight than sailing vessels, and merchants prefer them for carrying goods. These are the steamers that are fast 'routing out' our sailing craft in the Atlantic trade."
Of the foreign ships mentioned above, only the Cunard received a subsidy.
That was in 1857. On March 31, 1860, the Scientific American again referred to the subject:—
"Three years ago we directed attention to the great increase of foreign screw steamers, and showed clearly how they were rapidly taking away the trade that had been formerly carried by American ships.... Our merchants did not heed this injunction, and, as a consequence, their rivals have grown stronger, while they have become weaker. To-day nearly all the mail and passenger, besides a great deal of the goods, traffic, is carried by foreign ships, the great majority of which are iron screw steamers. These facts are indisputable; how can we account for them but upon the theory that iron screw steamers are the cheapest and best for the traffic?... We exhort our shipping merchants to examine the question candidly for themselves, ... for we assure them that 'the Philistines are upon them!' We have not a single new Atlantic steamship on the stocks, from one end of the country to the other, while in Great Britain there are 16,000 tons of new iron screw steamers building for the American trade."
It was in those days that the "New York interests," as Mr. Cramp says, "carried with them the ship-owners, ship-builders, shipping men, mariners, and all others in general," while they sneered at the screw propeller.
Other quotations to show how and why the British secured supremacy are worth making. Said the Nautical Magazine (New York) for February, 1856, regarding two steamers that had been compared in all particulars:—
"The extraordinary fact which presses itself upon our notice from the foregoing details by trials consists in the difference in power required in the two vessels to produce nearly identical speed ... 2050 H. P., economized by the screw, propelled the Himalaya at about the same speed as 3016 H. P., transmitted by paddles, propelled the Atrato."
The New York Journal of Commerce published the following warning in 1857:—
"While we are learning [to build steamships] England is using her advantages. Their merchants, captains, engineers, and sailors are carrying on our trade, and taking the bread from our mouths."
Congressman Nelson Dingley, Jr., of Maine, a prominent advocate of the subsidy system, in an article in the North American Review, dated April, 1884, said:—
"At the time Great Britain accepted our invitation to participate, on equal terms in the business of" transportation (it was in 1849), "experiments in iron ship building and steam propulsion were going on in that country, which, as early as 1855, began to work a revolution in marine architecture.... This revolution from wood to iron and sails to steam at once began to deprive the American merchant marine of" the advantages it had enjoyed.
The total number of British steamers receiving mail pay, or subsidy, in 1857, was 121, including the vessels plying to Ireland, the Isle of Man, the Orkneys, and other near-by points; among which was one line sending two steamers a day over its route. (See Nautical Magazine, September, 1857.) The total number of steamers under the British flag, in 1857, was 2132 (Rep. Com. of Nav. for 1901, p. 472). It is manifest that the mail pay aided the 121 steamers thus favored; it is equally manifest that the 2011 unsubsidized steamers were not only obliged to depend on their intrinsic merit for profit, but they were obliged to compete on unfair terms in all the trades (like that from Liverpool to New York) where the subsidized steamers were employed.
The progress made by the British iron screw steamer thereafter was pointed out by John Roach, in the course of his testimony, quoted above, when he said (p. 177) he "had found out by personal examination that there were 119 iron steamships plying between the ports of America and Great Britain. Of that number 110 were running to the port of New York."
A brief space must be given to a commonly accepted statement to the effect that the members of Congress from the South, in the decade before the Civil War, were opposed to the payment of subsidies to American steamers because of prejudice against the North. Marvin, in the American Merchant Marine, names Jefferson Davis and three of the men who were afterwards associated with him in his cabinet as president of the Confederacy, as leaders in this assault upon a Northern industry. The reader who is interested in making a candid study of the facts can find many speeches made by Congressmen from all parts of the country, in the Globe for the period in question. Part III, for 1857-1858, will be found most interesting in connection with this charge against Mr. Davis. On page 2832, third column, are the following words uttered by him (he was then a senator), on the method of paying subsidies:—
"Having established the mail line the question is, how shall the compensation be stated. In one of these amendments it seems it is to be the postal receipts. I think that altogether an objectionable method, and I shall vote against that amendment for the reason that this is to be a fluctuating amount.... The company cannot bear the fluctuation. The depression of commerce, the existence of war, or some other cause, may limit the correspondence, and cut off passenger and light freight, and then a line relying on postage receipts might not be able to run; whilst if the government allowed from year to year a fixed sum ... it might keep up the line."
Later Mr. Davis voted as he had talked. It is but fair to say that he, together with other senators and members of Congress, believed that the payment of subsidies, as a national policy, was objectionable, but so, too, did Ben Wade of Ohio, and other pronounced opponents of the "slave oligarchy." Senator Rusk, of Texas, was as firm in his support of the utterly reckless Collins Line as was Seward of New York.
The assertion, so often made at the North, that Congressmen from the Southern States, during the years immediately preceding the Civil War, were united in a conspiracy to injure Northern industries in order thereby to weaken the North and make the work of secession easier, is absolutely without foundation in fact. It is as absurd as the similar statement to the effect that the Secretary of the Navy (Toucey, a Connecticut man) had scattered the ships of the navy all over the world to weaken the fighting power of the general government. The truth is the ships were not as badly scattered in 1860 as they had been in several of the preceding years. Thus there were twelve ships upon the home station in 1860, but only five in 1851. Further than that, Toucey had for two years urged upon Congress the building of seven sloops of war of a draught of only fourteen feet, and Congress, on February 21, 1861, appropriated the money for that purpose. These shoal-draught vessels were admirably adapted for use in the waters along the Southern States, and that fact was pointed out during the discussion in the House. Nevertheless several members from the Southern States voted for the bill.
The subsidy policy was never treated as a sectional issue in Congress. Hamlin, of Maine, Vice-president under Lincoln, voted with the opponents of the subsidy men. (Globe, June 9, 1858, p. 2837.)
Hamlin's opposition is especially significant because he represented the great mass of unsubsidized ship-owners whose business was injured by the subsidized ships, and who were hot in their opposition to Collins.
Then it is to be noted that a chief argument urged by these Southern men against the payment of subsidies to the lines then in question was based on the belief that the ships were not fit for war-ships—were, in that respect, the shams they are now known to have been. In short, any candid reading of the speeches shows that in this question they were inspired by a desire to do what was best for the whole nation.
That one kind of sectional jealousy hurt the Collins line has been pointed out by Smith, in The Ocean Carrier—the well-founded jealousy of the ship-owners of Boston, Philadelphia, and Baltimore. The clipper ship-owners of New York also bitterly opposed the Collins Line. In fact, these unsubsidized ship-owners combined to fight the Collins lobby at Washington, and it was their influence that struck the "terrible blow" which Marvin says was inflicted by the Southern members of Congress.
The influence of the Civil War upon the merchant marine must now have consideration. First of all, the appearance of Confederate privateers upon the ocean at once doubled the rate of insurance on all American merchantmen. Then, when Commander J. D. Bullock, of the Confederate navy, was sent to England to buy iron-clad war-ships with which to raise the blockade of Confederate ports, and was induced to build swift cruisers with which to raid the North's merchant marine, a still heavier blow was struck. In all, the Confederates had 19 cruisers at sea, and they captured 257 merchantmen. The loss of these ships, however, was the smallest part of the injury suffered. The possibility of capture deprived American ships of the opportunity to obtain cargoes, and led to a cessation of building in American shipyards. It led many owners to transfer their vessels to foreign flags. It changed the currents of commerce. Naturally the British merchants took every advantage of their opportunity, as the Americans had done in the troubled days of the war with Napoleon.
One might suppose that the demand for naval ships would have given prosperity to the shipyards and engine works, but John Roach testified before the committee mentioned that "out of ten marine engine shops that were in existence in New York at the commencement of the war, his was the only one remaining in existence."
Though iron was largely used in the government ships, Nathaniel McKay, the ship-builder, told this committee that "we have got to have some experience in building iron ships. We have built but few iron ships, and most of them were failures."
Mere mention only of the transfer of American capital from the sea to the shore need be made here. With the depreciated currency there was plenty of opportunity for "wildcat" speculations; for government contracts, and for other kinds of investments more to the taste of honest capitalists.
The whole seafaring population spent the war period in acquiring new habits, while the British ship-builders were busy perfecting their arts, and the British merchants were establishing themselves firmly in the trades from which the war drove the Americans.
As a final reason for the decadence of the American merchant marine, note that the conditions of life in the American forecastle had greatly changed, and that this change began when the American ships were winning their laurels. With the advent of the packet system the "private venture" method of adding to a sailor's income disappeared, and with it one strong inducement to the young men who thought of going to sea. Then the old custom of making the forecastle a schoolroom, with the ship's officers serving as instructors in navigation, died out. The very prosperity of the American merchant marine served to deteriorate the quality of American seamen, for the number of ships increased much more rapidly than the seafaring population. Foreign sailors were employed for lack of enough Americans. In time even the number of experienced foreigners was insufficient. Captain J. S. Clark testified before the committee of Congress mentioned above that he had taken a ship to sea with "but two men out of a crew of sixty who could steer."
With the employment of foreigners the pleasant relations that had existed between the forecastle and cabin came to an end. The officers who had been shipmates with crews of ambitious young Americans found the foreign sailors, with their lack of ambition—with a certain slowness of movement, in fact—exasperating, especially when topsails were to be reefed after "carrying on" somewhat too long! This exasperation, with race or national prejudices to increase it, was what led to the use of the belaying pin and the pump-brake for the "encouragement" of sailors who failed to "show willing." Naturally, as time passed, the treatment of sailors grew worse, and an American statute which required the sailor to prove malice or revenge on the part of an assailing officer, when he had the officer arrested for ill treatment, did but add to the horrors of a passage on a driven ship. Dana, in his Two Years Before the Mast, describes mildly the treatment which common sailors received in American ships in his day. Jewell's Among Our Sailors describes the cruelty more in detail. It was a common thing for captains to torture men, and men were sometimes killed by the brutality which they could not escape. And while the conditions in the American forecastle were growing worse, those in the British were growing better. In 1869 Captain Cyrus F. Sargeant, the well-known ship-owner, testified that "the wages of sailors are lower in an American ship than in an English ship." It is well known that the port makes the wages for the forecastle, but it was true, then, that seamen on British liners, at least, saved more money in a year than the men on American ships.
The testimony taken before the Merchant Marine Commission, in 1904 (p. 1263), contains the following paragraph, the truthfulness of which was not disputed:—
"The condition of sea life under the American flag repels the American, boy and man. These conditions are mainly—we might say solely—due to the state of the navigation laws of the country. These laws are antiquated and disgraceful, compared to American standards: they were designed to govern slaves, and are maintained for the purpose of making slaves. No American boy with any spunk in him will submit himself to the conditions created by the maritime law, except (as frequently happens) as the alternative of a term in prison. Take any trade that now attracts the American boy and now holds the American adult, apply to those who follow it a special code of laws obnoxious to all conceptions of Americanism, repugnant to the dictates of humanity and condemned by the instincts of decency, and it may be regarded as certain that that trade would speedily be shunned by American labor. And if consulted about it the American people would be very likely to declare that if such laws are really necessary to the continuance of the trade in question, it would be a mercy to let the trade die in order to be rid of the laws.... To create a healthy popular interest in the whole subject of American shipping it is necessary to alter the laws affecting American seamen, thus, by inducing Americans to accept service at sea, creating an interest in the vital element of the subject, and also by reflex action, in the physical considerations involved."
This matter is of much importance here because, while life at sea was becoming absolutely unendurable, by a self-respecting American youth,—in an American ship, that is,—the opportunities for a career on shore were becoming more alluring. The young men who might have become leaders in our seafaring population—who might, perhaps, have found a way to maintain our supremacy at sea—were forced to suppress a natural liking for salt water; so they took the farms which the government gave away too freely; or they raised cattle on the unfenced plains; or they located mines; or they became managers and owners of factories where "protected" goods were made; or they obtained power and fortune from the railroads. While the British were strengthening their hold upon the sea, the Americans were steadily losing the sea habit.
It is manifest from any candid review of the facts that the decadence of the American merchant marine was wholly due to natural causes—to conditions of national development (the Civil War was a feature of our national development) that were unavoidable. It is unpleasant, but absolutely necessary, to face the facts. When the American merchant marine lost the command of the sea and the British gained it, the result was due to the working of the immutable law of the survival of the fittest.
IN 1866, just after the end of the Civil War, the American steam fleet registered for foreign trade, measured 198,289 tons. The steam vessels enrolled for coasting traffic measured 885,223 tons. In 1879 the steam tonnage in the foreign trade had fallen to 156,323, while the coasting tonnage had passed the million mark. In 1896 the coasting fleets measured more than 2,000,000 tons, while the foreign trade ships measured 264,289 tons. In 1908 the coasting steamers reached a tonnage of 4,055,295,—double the figures of 1896, and the registered tonnage was 598,737,—more than double that of 1896, but so far below that of the coasting tonnage as to warrant a serious inquiry into the causes which had created the contrast.
Before entering into this inquiry, however, it will be of interest to consider several features of the growth of the coasting traffic. First note that the cheap rates of transportation afforded by the ships running from such Southern ports as Savannah, Charleston, and Norfolk to Boston and New York have had a most remarkable influence upon the agriculture of the Southern coast States. Where once cotton only was raised, or cotton and tobacco, the land-owners are producing cargoes of vegetables at a season when such truck can be produced at the North only by the use of hothouses. The health of millions of people at the North, and the prosperity of other millions at the South, have been greatly promoted by the coasting steamers. At the same time the coast lines of railroads, to secure a share of the traffic which was originated by steamers, have improved their service so far that strawberries and string beans have right of way over passengers.
A natural evolution of traffic alongshore has been seen in the extension, so to speak, of the railroads across both salt and fresh water. Soon after the Boston and Providence Railroad was opened (June 15, 1835), its directors made an agreement with a line of steamers to New York under which the vessels of rival lines were excluded from the terminal facilities of the railroad, and the passengers from the rival lines had to wait hours for a train on which to continue their journey. In 1845 Daniel Drew, a director of the Providence and Stonington Railroad, became the president of the line of steamers running from Stonington to New York, and the two companies, for the purposes of traffic, were operated as one.
The railroads that terminated on the shores of Lake Erie engaged in the Lake traffic at an early date by establishing ship lines that gathered freight at all Lake ports of importance for transportation to the East, and, of course, carried the traffic from the East to the farthest points on the Lakes. These steamers had a marked influence on the development of the West. Of such lines as that which runs from Galveston and New Orleans to New York in connection with the Southern Pacific Railroad, only mention need be made, but the fact that the extension of railroads in this way across wide stretches of the waters of the country, has had a marked influence upon the prosperity of the country as well as upon that of the railroads, is memorable.
Another notable feature of the coasting trade is a revival of the old system, practised by such merchants as Derby, of Salem, when they built ships especially to carry their own goods to market. Thus, when petroleum was found in Texas, the Standard Oil Company built many vessels to carry the crude oil from the wells to the refineries at New York. The oil was taken through pipes from the wells to the ship, and it was pumped from the ship into tanks at the refineries. With the aid of such port facilities the cost of transportation was reduced to the lowest figure.
The United States Steel Corporation, owning ore beds near Lake Superior and mills near Pittsburg, built a fleet of ships to carry the ore to points on Lake Erie whence it could be shipped on a private railroad to the mills. The ore in the beds was scooped up with steam shovels and dumped into cars, by which it was transported to high trestles on the edge of the harbor. On the trestles it was dumped into pockets, from which it fell through chutes into the vessel, the hatches of which were spaced to correspond with the spaces of the chutes. A cargo of more than 10,000 tons has been loaded in two hours. At the port of discharge other scoops (a sort of dredge), made to operate through the hatches, lift the cargo out of the ship at a rate of more than a thousand tons an hour.
The great coal companies of the East deliver their coal in similar pockets on the coast, but they transport a large portion of it thence to the consumer by means of tugs and barges. In proportion to the coal carried, the tug-and-barge system costs less than cargo-carrying steamers. The tugs, with their high-priced crews, are kept moving; they tow the barges in "strings" to their destinations, dropping one here and another there, until the last is at the pier. Then they return, picking up the barges that have been unloaded, and take them to the pockets for more coal. The barges have small crews of low-priced men. The expense of waiting for the discharge of the coal is therefore less than if a steamer had carried the coal; it is even less than the expense of a schooner lying thus. The systems of handling cargoes in coarse freight trades of the American coast are, perhaps, the most perfect in the world.
Naturally, extensions of the railroad lines have been made across deep water. The Pennsylvania Railroad established the American line from Philadelphia to Liverpool in 1871. The Baltimore and Ohio established the Atlantic Transport line to Europe. The Louisville and Nashville created lines from Pensacola to several countries, including Japan and China. The Illinois Central has lines from New Orleans. The Occidental and Oriental Steamship Company was organized to carry the freight of the Pacific railroads from San Francisco to the Far East. Near the end of the nineteenth century the Southern Pacific Railroad bought an interest in the Pacific Mail. The Northern Pacific was served for years by the Boston Steamship Company, and the Great Northern Railroad built two of the largest cargo carriers in the world for an extension of service across the Pacific. Most of the ships in these extensions of railroads have been of American build.
In oversea traffic the through bills of lading and special terminal facilities gave the ships owned by railroads special advantages in the world's traffic. A great corporation is able to purchase supplies at the lowest prices. Further than that, it is not infrequently advisable to carry freight on ships at an actual loss in order to provide freight for the cars in which it can be carried with profit.
Another American adventure at sea that is of interest here was the evolution of the United Fruit Company. Individual dealers in perishable products of the tropics found it profitable to unite in gathering bananas and other fruits, and in chartering ships to bring them to the United States. As the business continued to increase, the need of swift ships, and for fittings to preserve the fruit in the best condition, led to the building of special kinds of ships (chiefly under foreign flags) and of machinery for loading and unloading the cargoes at the terminals. In the meantime, the speedy ships employed had proved attractive to passengers, and because passengers could be carried without decreasing the efficiency of the ships as fruit carriers, efforts were made to increase this branch of the traffic. In time the company built hotels for the comfort of the passengers at points in the tropics where a comfortable hotel was a surprise to the experienced traveller. Then because the well-contented fruit farmers of the tropics were unwilling to keep up with the demands of the trade in either the quantity or the quality of the fruit, the company bought land and produced the cargoes needed by their ships.
The Standard Oil Company employs nearly a hundred ships (chiefly under foreign flags), which it has built for the purpose, to transport its products to foreign countries. And there are other corporations that own ships as parts of their business equipment.
These American enterprises are of the utmost importance to the story of the American merchant marine, because they are the most modern features of our water-borne traffic. The great corporation is doing an ever growing share of the world's work, and the growth is an economic evolution that must be forwarded as well as controlled. In spite of the prevailing fear of great aggregations of wealth, it is worth while to inquire whether a further combination of corporate interests might not help on a revival of the American merchant marine. Suppose that a ship-building "trust" were united with the steel-making "trust" and the aggregation were to make a traffic agreement with a combination of railroads extending from the Atlantic to the Pacific, under which special low freight rates were obtainable; is it not conceivable that this powerful corporation might solve the problem of ships able to compete on deep water? Although the law now prohibits such combinations as this, may we not hope that the American people will yet learn how to preserve themselves from oppression, and the fear of it, without hampering the men who are able and eager to do the world's work on the world's terms?
In any consideration of a revival of the American merchant marine, it is necessary to view candidly the conditions which our ships must face. Emphasis is laid upon the need of candor, because in such discussions of the matter as have been had in periodicals, and before committees of Congress, the plainest facts of history have been frequently misstated, and, at times, deliberately misrepresented. If one-half the ingenuity and energy that have been used in arguing for the subsidy policy had been expended in evolving a revolution-making type of ship, we should have had, long since, a merchant marine worthy of the flag. Further than that, while an appeal to sentiment is justified, the matter ought to be viewed first as a cold matter of business.
Is the deep-water carrying trade worth the attention of American capitalists? It is a curious fact that in the hearings before the committees of Congress that have investigated the state of our shipping since the Civil War, not one word has been said about the dividends paid by the ocean carriers of the world. The reports of the committees assume that there is great profit in such shipping. One adroit advocate of the subsidy system says "the European steamship combinations ... now derive an income of about $200,000,000 a year from their control of our carrying trade" (Atlantic Monthly, October, 1909), leaving the reader to suppose that that great sum is divided as net profits.
As a matter of fact, the International Mercantile Marine Company, one of the larger corporations thus engaged (it is largely in the hands of American capitalists, too), has paid no dividends as yet (1909), and even its bonds sell below par. When the Cunard Company wished to build two ships to excel the swiftest of the German liners, it was unable to do so until the British government loaned it the necessary capital under conditions that amounted to a gift of the total cost of the ships. According to the Financial Times (London), dated Wednesday, April 14, 1909, the highest dividend paid by this most highly favored of all the British subsidized lines during the last fourteen years (1895-1908) was 8 per cent, which was distributed in 1900. The average distribution for the fourteen years has been 3.17 per cent a year. In 1895, instead of making a profit, the company lost £40,000. In 1904 there was a loss of £66,700. In 1908, while operating the two splendid and thoroughly well-advertised record breakers which it had received as a free gift from the British government (the Mauretania and Lusitania), it made the enormous loss of £249,800. A letter from the company to the writer admits that these figures are correct.
Said James A. Patton, then one of the foremost grain exporters of the United States, in a hearing before the Merchant Marine Commission of Congress in 1904 (Sen. Rep. 2755, 58 Cong. 3 sess. p. 714):—
"The ocean freight market has been so low during the past two years that at times the ship agents have offered to transport grain to Liverpool and London for nothing, to take it as ballast. Recently we have shipped corn from Boston to London at a price less than that ... less than nothing, owing to duties the port dues in London, which absorbed more than the freight rate received."
The conditions described by Mr. Patton are out of the ordinary, of course, but conditions which have kept the dividends of the well-subsidized Cunard Company under 3 per cent have prevailed for thirteen years. The company was able to earn the 8 per cent dividend in 1900 only because the war with the Boers created an extraordinary demand for ships to be used as transports, and these having been taken from the general carrying-trade freight rates rose to an abnormal point. Leaving out the abnormal dividend of 1900, the average distribution has been but 2.8 per cent.
The ocean carrying-trade is performed by two distinct classes of services; the line traffic, like that of the Cunard Company, and the independent cargo carrier or tramp service. The tramp will go anywhere and at any time for a charter price. The income received by the tramps is as uncertain as that of a prospector in the mining region. In spite of the ease with which the demand for tonnage is telegraphed around the world the tramps accumulate on this or that coast in numbers far beyond all needs of the trade, and rates drop to a point where many of them are glad to get away in ballast. At such a time, however, a lucky (perhaps a far-seeing) owner has a ship at a port barren of tonnage, and receives for a cargo that must go quickly a price that pays half the cost of the ship. It is the lucky stroke that keeps the seafaring people hoping against hope, just as the prospector remembers how Creede, of Colorado, made a million out of the Amethyst.
Then consider the effect of the tides in the business world upon the carrying-trade. After the war with the Boers the freight rates went to pieces. Owners ceased building new tonnage. The ship-builders, to keep their forces together, offered to construct the best of modern vessels at cost of construction. Thereupon new capital came into the trade, and some men of experience also placed orders. In this way an excess of tonnage was kept afloat. Meantime much old tonnage in the progressive countries like England and Germany was placed on the market at forced sale, and these ships were bought by continental owners who patched them up ("cheap repairs for the cheap ones"), and sent them, with cheap crews, looking for cargoes. It must be kept in mind that Chinese owners, who can hire stokers at $6 a month, are competing in the world's traffic, as well as owners who have to pay $40 a month for the same kind of work. Where the Chinese owner can make money, and the owner of the best of modern freighters can live, and even make a lucky stroke, now and then, the owner of the average tramp keeps her running because the losses while she is in commission are less than when she is laid up in ordinary. The tramp traffic is precisely like mining in that the luck of the few keeps the many trying. Moreover the trend of business has been, for some time, away from tramps and into regular line ships, and that is a fact worth serious consideration.
The average profit of the lines of steamers is well set forth in the statement of the Cunard Company, unless, indeed, that statement is more favorable than the average facts warrant. The Hamburg-American Line dividends during the past fourteen years have averaged 5¾ per cent per annum, and it is likely that but one other ship-owning corporation has done as well on deep water. It is a world's traffic even for a line that plies between New York and Liverpool only. The price that a Swedish tramp will accept for wheat in the River Plate, and the rate which the Japanese will accept on the coast of China, both affect the North German Lloyd at Bremen. A few lines, especially those having special trades, make good dividends. The United Fruit Company's ships are among the exceptions because of the peculiarities of the business. But every ship-owner knows that on the average there is no great part of the world's work that pays smaller dividends than carrying cargoes across deep water.
The people of the United States, before taxing themselves to add to the congestion upon the high seas, should ask themselves whether success, when attained, will be worth the cost. Would a sensible American farmer, able to earn $3 a day grafting orchards, work overtime in order to compete with a foreign ditch digger receiving $1.50?
If we decide to make the fight for a share of the business of the sea it will then be of the utmost importance to consider the strength of the opposition to be overcome. In this inquiry no account will be taken of ships of the sail. For while schooners fit to carry from 3000 up to perhaps 10,000 tons' dead weight came into use in the coast coal trade at the end of the nineteenth century, and proved profitable, it is absurd to think of any kind of sailing ship in connection with future traffic on deep water.
According to the last Report of the Commissioner of Navigation (1908), the United Kingdom had, in 1907, 4105 steamships, measuring 9,156,356 tons, with crews aggregating 185,867 men (this "includes masters as well as Asiatics and Lascars"), in the foreign trade, besides 239 ships of 240,983 tons, manned by 5362 men, engaged partly in the home, and partly in the foreign, trade. The tonnage of 1907 was about four times as great as it was in 1880.
The German Empire had, in 1908, 2521 steamships, of 4,070,242 tons, manned by 65,568 men. This tonnage was twice as large as the tonnage of 1900.
In 1908 the Japanese had 626 steamships of 1,076,070 tons, which was twice the tonnage registered in 1900. The number of men in the fleet is not given, but it was at least 16,000.
The steamships of the world, exclusive of those of the United States, measured, in 1906, more than 30,000,000 tons. Perhaps 800,000 men were employed on these ships, and there was an experienced force of owners and managers on shore to look after the interests of the fleet.
The quality of this vast sea power must now be considered. In this point of view it is a most discouraging fact that about all important improvements of recent years in the steam engine have been made by Europeans. Between 1855 and 1865 steam pressures in boilers ranged from 20 to 35 pounds per square inch, and the consumption of fuel was about 3 pounds per horse-power-hour. Compound engines came into general use between 1865 and 1875, when boiler pressures rose to 125 pounds, and the consumption of fuel decreased to 2.2 pounds and even less. Between 1885 and 1895 twin screws and quadruple expansion engines were adopted for the swiftest ships, and the improved engines were used on many cargo carriers. Boiler pressures reached 225 pounds and upward, and the coal consumption dropped as low as 1.4 pounds. Then came the far-reaching change to the steam turbine, on ships of 14 knots and upward. For slower ships the turbine in combination with reciprocating engines has been found more efficient than the old-style engines, while a combination of the turbine with the dynamo for still slower ships is now in hand and sure to make headway. In all these matters Europe has taken the lead.
In the turbine, with its combinations, it is believed that the steam-engine reaches its highest possible efficiency, just as sails reached their highest efficiency as used on the American clipper. But a new machine, still more economical, has been invented—the gas motor. Coal is used for the generation of gas, which drives internal-combustion motors, much like those seen on automobiles. The consumption of fuel is thereby reduced far below that of steam engines.
While the marine steam-engine has been perfected in Europe, it is worth noting by the way that the producer-gas engine, though yet in the experimental stage for ship use, has been brought to a higher state of perfection for land use in America than in Europe. Magazine articles by marine engineers have been published, urging American ship-owners to adopt this new method of propulsion, because it is to make a revolution almost as far-reaching as the iron screw steamer made in 1855. But the American ship-owner refuses to see his opportunity. Having certain profits with old-style engines in the coasting trade, he is willing to let foreigners do the experimenting.
All of this is to say that the ship-owners of foreign countries are at least as far-sighted and enterprising as those of the United States.
Some of the facts in the story of our coasting steamer trade are of interest in this point of view. The most interesting division of this fleet is found upon the Great Lakes. The screw propeller and the compound engine were successfully introduced on the Great Lakes before 1850—several years before the iron screw steamer of the British began its deadly inroads upon our salt-water trade—but the Atlantic coast remained indifferent.
After the Civil War tugs came into use for towing the sailing vessels through the Detroit and Huron rivers, and from these the use of barges in "strings" behind steamers that carried cargoes as well as served as tugs, was developed. This system ruled upon the lakes until the evolution of the iron ore trade led to the building of ships so large that they were unable to handle barges. In 1902 the ship able to carry 10,000 tons arrived.
Still larger ships have been built since 1902. A ship that can carry 12,000 tons' dead weight needs but thirty-five men, all told. The average cost of carrying freight on the best ships of the lakes is less than .8 of a mill per ton-mile. Through natural development this splendid efficiency has been attained, and the fleet in 1908 numbered 1942 ships measuring 2,341,686 tons.