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proposed appropriations are intended merely to compensate for services to be rendered, but admittedly the larger part is pure gratuity, no matter by what name called. This objection is fundamental and no amount of sophistry or volume of specious argument can obscure it. Were it limited simply to payment for mail service and the establishment of new mail routes, it might be acceptable for that purpose, though not as a real aid to the merchant marine. By its terms subsidies are granted to seven steamship lines, as follows:

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Atlantic coast to Brazil, 16-knot steamers
Atlantic coast to Argentina, 16-knot steamers.

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Gulf coast to Isthmus of Panama, 14-knot steamers
Pacific coast to Isthmus of Panama, Peru, and Chile, 16-knot steamers
Pacific coast, via Hawaii, to Japan, China, and the Philippines, 16-knot

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steamers

North Pacific coast to Japan, China, and the Philippines, 16-knot steamers..
Pacific coast to Samoa and Australia, 16-knot steamers.

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An examination of the proposed routes will prove interesting. Of the three provided for the Atlantic trade, the two intended to establish routes to South America are confined to ports on the Atlantic coast. As far as Government aid can accomplish it, this means turning the traffic of the Middle West and Mississippi Valley through the Atlantic ports. It must be borne in mind also that not only is this vast and fertile territory permeated by a network of railway systems having their southern termini on the Gulf of Mexico, but that the rivers which drain it throughout its length and breadth furnish the most healthful competition in freight rates.

That more direct and rapid communication should be had between the United States and South America may be granted, but that the Government in establishing such communication should deal impartially with all sections, is but common justice. The Gulf ports should be permissible termini, and capital should be afforded the opportunity of establishing a Gulf line to these South American ports. That the natural direction for the products of the Great Middle West and South intended for export is to the south and southeast is manifest to all acquainted with our railway and river transportation facilities. That competitive bidding for these mail routes between Gulf and Atlantic steamship lines would inure to the benefit of the Government is plain; it might be the cause of procuring a Government contract at a price other than the maximum allowed by law-a consummation devoutly to be wished. As the bill reads, the Gulf is limited to one line to Panama with a maximum compensation of $150,000, as against Atlantic lines with a maximum compensation of $1,400,000. But whether the line runs from New York or a Gulf port to South America, the compensation fixed for mail service is excessive and should be reduced.

PACIFIC LINES.

The Pacific routes proposed are apt illustrations of the results flowing from Government gifts to private industry. The strong, not the weak, are ever the favored ones. From the Pacific coast four lines are provided for with an aggregate subsidy of $2,200,000. Three of those lines are to the Orient, and $200,000 will be given to the Spreckels line, known as the Oceanic Steamship Company, which is in addition to the compensation of $283,000 now given under an existing contract with the Government for carrying mails on the same route. Connected with the other two oriental lines, is a striking and suggestive coincidence. It is provided that one of those lines shall be from a port north of Cape Mendocino, and inferentially and naturally the other shall be south of that point. Now, to the unthinking, it may be a matter of no importance that Cape Mendocino should divide these two subsidized steamship lines, both of which will run to Japan, China, and the Philippine Islands, the only difference being that one is to go by way of Hawaii and each receiving $700,000 for the service and for the same speed. But when it is recalled that at Seattle, north of Cape Mendocino, is the existing steamship line, owned by J. J. Hill, and south of it, at San Francisco, is the Harriman line, the Pacific Mail, we may be begin to suspect that there is a "nigger in the woodpile."

Who are J. J. Hill and E. H. Harriman? The former is the great railroad magnate of Northern Securities Company notoriety, who tried to merge vast interests in violation of law and was only prevented by proceedings in the courts. Harriman is another great leader of corporate wealth, who controls more railroad trackage than any man in the world. Is it hard to guess who, under the terms of this bill, would pocket $1,400,000 of the people's money? And the justification of this is thus stated in the majority report:

Responsible shipowners have stated that unless this bill or an equivalent is passed, some, if not all, of the vessels composing this skeleton of a Pacific fleet will have to be laid up or abandoned to foreign nations which can and do sustain their merchant marine.

This same scarecrow has been doing duty for many years, and on the strength of this threat the very people making it are to be given access to the public Treasury. Does anyone seriously believe that the Hill line out of Seattle will be abandoned unless this aid is given? Has Mr. Hill himself ever so declared? Will there be any other result in voting this $700,000 than to change his 14-knot vessels, by slight alterations, into "speed-trial " vessels of 16-knot speed? Will the added speed compensate the American people for the $700,000? Will the Oceanic or Spreckels line to Australia abandon its present subsidy from the Government of $283,000 unless we give it an additional $200,000? We confess to an incredulity not to be removed by the vague prophecies of a "to-be-abandoned line " that has been made to do duty whenever subsidy legislation seemed in sight. The subsidy to the Pacific Mail or Harriman line is even more indefensible. Without the slightest change it can put five of its regular steamers into the service and, save for making Manila a regular port of call, no benefit will accrue to the American people. Legitimate aid to this and all other Pacific lines could be given by doing our duty by the Philippine people, by giving them a market in America

for their exports and thus creating a real commerce for American ships to carry.

The line to Chile means simply an extension of existing Harriman lines now running to Panama and the $600,000 given is out of all proportion to the service to be rendered. But this is not all. While professing to provide better mail facilities, and relying on that for its justification, the bill will actually accomplish no such result so far as oriental service is concerned unless the Post-Office Department continues to pay for mail service on other routes than the subsidized ones. The bill provides for a fortnightly service on each line, and reference to the report of the superintendent, division of foreign mail, for the year ending June 30, 1906, will show that the existing mail contracts for this oriental service exceeds this. On page 25 of this report the superintendent says:

TRANSPACIFIC MAILS.

By means of steamers sailing three or four times a month from San Francisco and three or four times a month from Seattle or Tacoma, mails for Japan and China have been dispatched not less than seven times a month.

These mails have included articles for the Philippines, but mails for the Philippines have also been dispatched by army transports, which sailed from San Francisco for Manila about every twenty days. Correspondence for Japan and China has also been forwarded to Vancouver, British Columbia, for dispatch per steamers leaving that port about every three weeks, when the delivery of the correspondence would be thereby expedited.

Mails for the Australasian colonies have been dispatched from San Francisco once every three weeks by means of the contract steamers of the Oceanic Steamship Company, the transit time from San Francisco to Sydney being twenty-one days, and mails being delivered en route at Pago Pago.

Advantage is also taken of the opportunities offered for the dispatch of correspondence for those colonies by means of the Canadian Line of steamers sailing from Vancouver, British Columbia, once every four weeks.

The Oceanic steamers and those from Vancouver, above referred to, call at Honolulu, and most of the steamers en route from San Francisco to Japan and China usually call at Honolulu. Including the service under domestic mail contracts between San Francisco and Honolulu, there were from seven to ten opportunities a month for communication by mail with Hawaii, and generally there are not less than eight.

Mails for Japan, China, and the Australasian colonies are forwarded from San Francisco to Honolulu, to be transferred there to steamers sailing from Vancouver and calling at Honolulu en route to those countries; and mails for the United States arriving at Honolulu by steamers bound for Vancouver are transferred to steamers sailing from Honolulu to San Francisco. By such transfers the delivery of the mails so transferred is expedited by three or four days.

In pointing out the many objections to the bill it is perhaps but fair to the members of the committee, who by their votes reported it to the House, to say that the committee never had an opportunity to consider it. It was offered by a member whose service on the committee commenced that day, and was reported without other explanation than that briefly made by him at the time. No hearings were had, nor opportunity given for hearings. As to how the particular amounts for each of the lines subsidized were arrived at we are uninformed. We are assured that they are adequate and can well believe it.

LABOR HOSTILE TO THIS LEGISLATION.

The well-known hostility of the workingmen of the country to this legislation has resulted in a very pronounced effort in the majority

report to discredit as un-American any laboring man who declines to be taxed to make some other man's business profitable. "American labor-intelligent, genuine American labor-knows that labor's cause is not helped by a tax on the fruit of labor's toil, even though a few more ships are built in American shipyards. They know that the real way to keep those yards ever busy with the hum of industry is to give to them the steel and other raw material that enters into the ship's construction at a fair price, and then "American laborintelligent, genuine American labor "--the highest skilled and the cheapest because the highest skilled, will in the shipbuilding industry, as in every other manufacturing industry, build as cheap as anywhere in the world. In the appendix will be found the action taken by the American Federation of Labor touching subsidy legislation.

NAVAL RESERVE FEATURE.

It is proper to state that the bill reported from the House committee is an improvement upon the Senate bill, in that the impressment feature is eliminated from the bill to the extent of no longer requiring the maintenance on the subsidized ships of a naval reserve. The provision, however, for payment of volunteers in such service is preserved. This method is experimental, and the result that may be accomplished doubtful. Whenever Congress really legislates so as to rehabilitate a merchant marine, it will not be necessary to offer these inducements for a naval reserve. Even as in the days when America was the conqueror of the Mistress of the Seas there will be found Americans bred to the sea ready and anxious to fight for the country and her flag.

HISTORY OF AMERICAN MAIL SUBSIDIES.

In order that we may judge as to the correctness of the estimates of the advantages which the supporters of this measure claim will accrue to the Government, it may be well to take a cursory view of what has been accomplished in the past along similar lines of legislation.

In the report of the majority of the committee reference is made to a recommendation of President Polk immediately preceding the granting of our first definite mail subsidy. In the light of subsequent events it is made to clearly appear that President Polk was mistaken in the optimistic view which he then took of this policy, and another Democratic President was forced to put an end to it because it had failed to accomplish the expected result.

THE COLLINS SUBSIDY.

In 1847 Collins and his associates agreed to carry the mail between New York and Liverpool twice a month during eight months of the year and once a month during four months for $385,000 per annum. He also agreed to build five ships of not less than 2,000 tons measurement and 1,000 horsepower. The company never performed its contract as to the new ships. It built four new ships, one of which was destroyed, and then proposed to build another in its stead, which should be the fifth new ship. In 1852 the contractors asked for an

increase of pay from $385,000 per annum to $858,000 per annum, giving six additional trips to the twenty already provided for. The Government also reserved the right in the old contract to cancel it upon an agreed notice, which provision the contractors sought to avoid in 1855.

The service began April 27, 1850, and on June 30, 1854, the contractors had received $2,620,906, while the whole amount of postage received by the Department was only $734,056.

An act making appropriations for the transportation of the United States mails for the fiscal year ending June 30, 1856, contained the appropriation of $858,000, which was vetoed by President Pierce in a message on March 3, 1855, reciting the above facts and containing the following language:

It will be regarded as a less serious objection than that already stated, but one which should not be overlooked, that the privileges bestowed upon the contractors are without corresponding advantage to the Government, which receives no pecuniary or other return for the immense outlay involved, which could obtain the same service of other parties at less cost, and which, if the bill becomes a law, will pay them a large amount of public money without adequate consideration-that is, will in effect confer a gratuity while nominally making provision for the transportation of the mails.

To provide for making a donation of such magnitude and to give to the arrangement the character of permanence, which this bill proposes, would be to deprive commercial enterprise of the benefits of free competition and to establish a monopoly in violation of the soundest principles of public policy and of doubtful compatibility with the Constitution.

It will be seen from this statement of the President of the United States in 1855 that, as the majority report of the committee says, "the United States was expending $2,000,000 a year in postal payments to these lines of steamers," but that the United States was receiving no pecuniary or other return for the immense outlay involved.

The reports of the Postmasters-General from 1846 to 1858 contain a mass of matter supporting the position of President Pierce and refuting the arguments of those who advocate postal subsidies as a means for building a merchant marine.

John Wanamaker, Postmaster-General, in 1891, in his annual report, did not find that the United States had received" an abundant reward in increased maritime strength and increased commerce," as a result of this early mail-subsidy legislation. He said:

But two American subsidy bills, prior to the present one, have ever become laws. Both of these were of direct application to particular lines of steamers, and neither subsidy was continued long enough to demonstrate the general effect of the system. These were the Collins and the Pacific Mail subsidies. * * * The Collins Line subsidy was soon withdrawn. * The Pacific Mail subsidy caused an immediate and important increase in the capacity of that line, but the methods by which the advantage was secured rendered it an easy prey to stock jobbers, who, when it suited their purpose to injure the company, published the operations of the lobby and caused a speedy repeal of the law.

In 1892 Mr. Wanamaker made the following statement, after setting out in tabular form the contracts he had made during that year for the carriage of ocean mail:

The new ocean mail service, therefore, applies to eleven lines, comprising when completed 42 ships of 165.802 tonnage, and the contractors will be required to spend fourteen millions to provide ships necessary to make the service contracted for frequent enough and quick enough to comply with the terms agreed upon.

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