AMtrtlC'' ■■"■"irro'r O" A"': rr-ííCAN NAVÍt^". I !v ■"■!
THE SHlPPU-iG CCSÍ5 ry OF AtoiERICA
LLS
The Compact for
Ship Protection by
Navigation Laws
By WILLIAM W. BATES, N. A.
President the Shipping Society of America
ar Library
Read before the Trans-Mississippi Commercial Congress
Denver, Colorado, August, 1909
Mr. President a nd Gentlemen :
There is much misunderstanding of the shipping ques¬
tion. While it is not possible in this paper to point out all
the influences responsible for the decline and decay of our
marine in the foreign trade, and to show fully the true pol¬
icy for its restoration, the facts essential to an understand¬
ing of the case are few and plain. These may all be included
in considering TUE COMPACT FOR NAVIGATION
LAWS, and in noting the consequences of its violation.
Citizens who may not know that among these conse¬
quences the rain of our marine and the loss of our ocean-
carrying trade are painful actualities should be shown that
this is the case.
ORIGIN OF POPULAR INTEREST IN NAVIGATION
"Cutting otî our commerce with the world" was an act
of tyranny of tlie British parliament, denounced in the Dec¬
laration of Independence. That act originated the "Ship¬
ping Question" with the American people.
After granting our independence in 1783 the British
king cut off our commerce again by closing against our ves¬
sels all his harbors in the West Indies and in his loyal prov¬
inces. All trade with these places had to come and go by
British vessels. This regulation was another violation of
our rights, well calculated to unite our people in demanding
protection to navigation.
To meet the situation Thomas Jefferson proposed "navi¬
gation laws." The idea was adopted, hut the confederate
congress had no authority to regulate our trade, and the sev¬
eral states were asked to grant it for fifteen years. This
movement failed. Then each state, for itself, enacted trade
regulations, consisting of discriminating tonnage and tariff
duties. Unfortunately for their efficacy, each state being
foreign to another, the duties applied to the vessels of sister
states, as well as to those of foreign nations. Little protec¬
tion resulted, and it soon became clear that an American
marine could only result from a "uniform system" of regu¬
lations, ap])licahle only to foreign vessels. This system could
only spring from a "closer union" under a written constitu¬
tion.
OBJECTS OF THE NATIONAL GOVERNMENT
Daniel Wehster, called the "expounder" of the consti¬
tution, in one of his great speeches, thus gave the reasons for
instituting the national government:
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"Maritime defense, commercial regulufions and national
revenue were laid at the foundation of our NATIONAL
COMPACT.
"They are its leading principles and causes of its exist¬
ence.
"They were primary considerations, not only with the
cou rcufioii which framed the constitution, but with the peo¬
ple when they adopted it.
"Tliey Avere the ohjccis, and the only important objects,
to whicli the states (separately) were confessedly incompe¬
tent. To effect these by the means of the national govern¬
ment was the constant, the c.rliaustless, topic of those who
furorcd the adoption of the constitution.''
PROTECTION OF SHIPPING A PRIMAL OBJECT
In other words, the second of the three great objects
of the Union was the encouragement and preserration of an
American MEIICIIANT MAKINE by regulations of com¬
merce.
As Jefferson expressed it, "Navigation Avas one of the
'four pillars of our ])rosperity,' and it could only he advanced
by a general administration of 'navigation hiAVS.' " Certain
poAvers of the states must he giAon up by them, and taken
over for exercise by the national gorern ment. The natural
duty of the states in res])ect to many tilings must become the
hounden duty of the United totales. This became the Avork
of tlie constitutional convention of 1787.
The ])roceedings of that coiiAentiou, the action of the
states aiiproving them, the l(>gislation of congress folloAving,
tin; s])eeches of our early statesmen, all shoAV that our con¬
stitution is largely a collection of compacts, to be sacredly
ohseiwed, that for Ihe preservation of navigation being one
of Ihe nioxl i m porta nt. Congress can not laAvfully modify,
suKjiend or abrogate e()mpacU. Such ])OAvers as hav(^ lieen
grant(Hl to it are not for oimament, hut for faithful use, a
duty attaching to every poAver; hence ship ]>rolection is im¬
pera I i re.
THE PROMISES OF UNCLE SAM
In 1787 the several slales Avere jirotecling their shipping
as best tliey could. Uncle Sam says: "Give me that job;
I can do it hetter.'' Said Ihe states: 'AVe Avill turn OA^er
our poAver to you on the ringle condilion that you consider
it a f'Gl/P.lCV I\ I'lJItl'ïyr 1 ri')' to ¡>erform the trork
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fuUij and honestly." "Trust me for that," says Uncle Sam.
"I will perform all the compacts of the constitution, one
just as well as another." DID HE DO IT? For forty
jears he did. The best marine in the world was created,
(tf our own trade our ships carried 95 per cent, of imports,
90 per cent, of exports. Daniel Wehster said in 1825 : "We
have a commerce which leaves no sea unexplored; navies
wliich take no law from superior force." Then came a pres¬
ident—a disbeliever in ship protection—who was not con
tent. Shipping had been fostered long enough. It could
tlien defy all rivalry, and encouragement should therefore be
removed. Congress took this unwise advice. Xoir. we have
little commerce, and no ships looking for it. As for navies,
we now depend on the British marine for colliers and trans-
])orts when we need them—and this dangerous and disgrace¬
ful state of things is to continue, apparently, for all time to
come !
In 1828 the very same congress that voted the highest
protection to manufactures stripped protection from nari-
(jation. The act was roid for uucoiistitutionality. The com¬
pact made was to cherish navigation, not to perish it by ex¬
posure to deadly competition. Aow that this act appears
perfidious, what does Uucle Sam do about making amends?
Disregarding the history and the lair of this case, he talks
once in a while about "ship snhsidy" as a remedy, but never
enacts a bill. The true prescription—the retraeiny of his
false step.s—does not please our lirais, and the old sinner
hesitates to act. If he were a j/ist and an honorable man, who
liad made a mistake, he would at least offer to return the
power that he does not exercise, and let the states use it.
But do justice and honor ai)])eal to him? He feels guilty
(»f destroying the marine of tiie country, and he seems to
think he might as well as not fill his boni with disrepute.
He therefore scruples not to give government employment to
foreign ship])ing, instead of to our oirn: nor to open our
domestic trade to the shipping rings of foreign nations.
Armed with the power that lie promised to use patriotically,
he boldly bestows upon foreign ships the business—THE
WOBK—belonging to our own. The rights of our ship own¬
ers he despises and sacrifices; hut the pririleges which he
gives without authority to foreign ship owners, even to those
of d.\PAX, he holds holif and sacred. American ships, built
under compact for protection, must run under open trade,
"root hog or die," and they perish under such a policy.
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SHIPPING IN THE CONSTITUTIONAL CONVENTION
Let us return to the springhead of the constitution.
This was the meeting at Annapolis, called by the advice of
Washington, to agree upon protective regulations of com¬
merce and navigation, which all the states should enact.
Delegates from only five states attended. By advice of Mad¬
ison no business was done, except to call a convention at
Philadelphia. This was attended by delegates from twelve
states, Rhode Island holding aloof. These delegates fonnded
Ihe federal government. General Washington presided. In
transmitting the constitution to the congress of the time, he
thus stated its principal objects :
"The friends of our country have long seen and desired
that the power of making war, peace and treaties; that of
levying money and regulating commerce, and the correspond¬
ing executive and judicial authorities, should he fully and
effectually vested in the general government of the Union."
Foreign commerce consists of trade and transportation.
If a merchant owns his shipping, his business is commerce;
if he owns no shipping and others do his carrying, his busi¬
ness is trade; if an owner does not also trade, his business
is transportation or navigation. We have now some foreign
trade, but very little commerce. Our impolicy has turned
that over to foreign nations. But for the exclusion of for¬
eign vessels from our domestic carrying (coastwise, lake and
river), we would have no shipbuilders, nor any establish¬
ments competent to build battleships for defense.
Several plans for a constitntion were offered the con¬
vention of 1787, all providing for the regulation of commerce
—FOR SHIP PROTECTION. In one from South Caro¬
lina, and in the draft of one by a committee of the conven¬
tion, the second "enumerated power" read thus;
"To regulate commerce with all nations and among the
several states."
In tlie instrument adopted the third ])0wer reads thus:
"The congress shall iiave power to regulate commerce
with foreign nations, and among the several states, and with
the Indian tribes."
As it was intended, congress exercised this power when
it first ap])lied discriminating duties of tonnage and of im¬
post for the lU'otection of shii)])lng in 1789. This method is
specific for its ])urpose. A specific method precludes all
others. Where two or more ways may be taken tbese are
si)ecified, not left to be imagined; as, for instance, to sui)port
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the government, congress may impose taxes or horroiv money.
But there is no choice of methods for industrial protection.
Regulations of commerce serve for all pursuits.
SHIP PROTECTION DISCUSSED IN CONVENTION
It is unreasonable to assume that the constitution con¬
tains authority for ship-suhsidy protection. The country
was not in condition to warrant it; nothing was more foreign
to the temper of the people, while trade regulations were in
general use. The only question debated was whether or not
a "two-thirds" vote should be required for the passage of a
"navigation act."
General Pinckney, of South Carolina, thought this re¬
striction reasonable, and advocated it.
Mr. Clymer, of Pennsylvania, said: "Difficulties ought
not to he increased by unnecessary restrictions. The north¬
ern and middle states will be ruined if not enabled to defend
themselves against foreign regulations."
Gouverneur Morris, of Pennsylvania, declared that
"preferences to American ships will multiply them till they
can carry the southern produce cheaper than it is now car¬
ried. A navy was essential to security, particularly of the
southern states, and can oyily he had by a 'navigation act'
encouraging American bottoms and seamen."
Mr. William.son, of North Carolina, thought "the restric¬
tion would please the southern people."
Mr. Spaight, of Virginia, opposed the motion. "The
southern states could at any time build ships for their own
use."
Mr. Butler, of South Carolina, also opposed the motion,
while Mr. Mason, of Virginia, supported it.
Mr. Wilson, of Pennsylvania, thought "If every peculiar
interest was to be served, ununiinity ought to be required."
Mr. Madison, of Virginia, went fully into the subject:
"The disadvantage of the soutliern states from a 'navigation
act' lay chiefly in a temporary rise of freight, attended, how¬
ever, with an increase of southern as well as northern ship¬
ping, with the emigration of northern seamen and merchants
to the southern states, and with a removal of the existing
and injurious retaliations among the states on each other.
The power of foreign nations to obstruct our retaliatory
measures on them, by a corrupt influence, would also be less
if a majority should he made competent to legislative acts in
this case. An abuse of the power would he qualified with
all these good effects. But he thought an abuse was ren-
dered improbable by tbe provision of two branches; by the
independence of tbe senate ; by tbe negative of tbe president ;
by tbe interest of Connecticut and New Jersey, which were
agricultural, not commercial, states; by tbe interior interest,
which was also agricultural ; by the accession of western
states, Avbicb would be altogether agricultural. The south¬
ern states would derive an essential advantage in the general
seeuritg afforded by tbe increase of our maritime strength."
ULTIMATUM OF NEW ENGLAND
Mr. Gorham, of Massachusetts, speaking for New Eng¬
land, said: "If the government is to be so fettered as to be
unable to relieve the eastern states, what MOTIVE can they
hare to join it, and thereby tie their own hands from meas¬
ures which they might otherwise take for themselves? The
eastern states were not led to strengthen the Union by fear
for their own safety. He deprecated the consequences of
disunion, but if it should take place it was tbe southern part
of the continent that had the most reason to dread them. He
urged the improbability of a combination against tbe inter¬
est of the southern states, the different situations of the
northern and middle states being a security against it. It
was, moreover, certain that foreign ships would never be
altogether excluded, especially those of nations in treaty with
us."
The attitude of Pennsylvania, Virginia and iMassachu-
setts satistíed the convention that the PROTECTION of
shipping, irithont restrict ion, was an indispensahle require¬
ment for a permanent union of the states. Accordingly, the
grant of ])o\ver was made nein. con. No ])rovision of the
constitution contribuled more to its popularity than the
power thus granted unanimously. No power ever exercised
by congress evei' created more prestige or ad ran tage for our
rcqniblic. Our early marine was verily the "Child of Pro¬
tection." Nevertlieless, incited by the arguments of the
¡ncsideiit, unmindful of its dnty under the compact, congress
])rovided for tlie conditional suspension of shi]) ])rotection in
the foreign trade in 1S2S, and that it should be entirely witb-
druAvn, as different foreign nations might rcipiest from time
to time. Tlie se(|nel sliows that this action was wholly in
the interest of ceilain seltish i-i\'als, and so continues. The
reasons foi- the act were specious and false. It was without
authority, was roid and full of eril consiMpiences. Put the
coTigress of 1S2<S could only surmise tliese, while the con¬
gresses of forty years past have liad the eridenee before tliem.
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iu reports aud statistics of the treasury department. Special
reports made in 1870-'72 showed, conclusively, that the act
had worked the dccJinc of American transportation since its
passage, and was then threatening to complete ¡fs extinction
in foreign trade.
THE ACT THAT HAS DESTROYED OUR MARINE
"That upon satisfactory evidence being given to tlie pres¬
ident of the United States, by the government of foreign
nation, that no discriminating duties of tonnage or impo.st
are imposed or levied in the ports of said nation upon vessels
wholly belonging to citizens of the United States, or upon
the produce, manufacture or merchandise imported in the
same from the United States, OR FROM AAU FOREIGN
COUNTRY, the president is hereby authorized to issue his
proclamation declaring that the foreign discriminating du¬
ties of tonnage and impost within the United States are and
shall be suspended and discontinued so far as respects the
vessels of the said foreign nation, and the produce, manufac¬
tures and merchandise imported into the United States in
the same from the said foreign nation, OR FROM AA'F
OTHER COUNTR Y : the said suspension to take effect from
the time of such notitication being given to the presideut of
the United States, and to continue so long as the reciprocal
exemirtion of vessels belonging to citizens of the United
States and their cargoes, as aforesaid, shall be continued,
and no longer."
There is always an excuse for every mistake. The advo¬
cates of this act theorized ihat protection to an industry
need only he ieuiporunj; if the other nations gave up their
protective regulations ire might do so, too, and receive no
damage. Our shipping experienee has taught us diff'erently.
Some nations had udrantages that were not taken into ac¬
count. U'e had, disadrantages not eonsidered. Discrimi¬
nating duties and preferences were only one form of protec¬
tion. These being sus])ended, our rivals invented all sorts
of ])rotections to take the place of the regulations set aside.
The llritish devices were most effective iu gaining preference
for their vessels. The llritish gorern nient has paid subsi¬
dies and siihreniions. and let its subjects destroy our ship¬
ping when the Civil War raged. The London IJoyds waged
for many years a diseriminutire irarfare of marine inspec¬
tion aud insu ranee against our ships, fouler and meaner than
llritish merchants, owners and underwriters erer before en¬
gaged in. Accordingly, they have profited most from the
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ruiüoiis act of 1828, though they refused to accept its benefits
for twenty-one years, fearing to lose more than they could
gain.
jSoic, if we plan legislation for the restoration of our
shipping power, the British press prescribes the tonic of
"ship subsidy." First, because they know the effectiveness
of trade regulations; second, because the people of the United
States would not, 3'ear after A'ear, vote the taxes necessary
to make much change in our situation; third, because, if they
would, any nation that can huild and run vessels cheaper
than we eau, and who control most of the carrying trade of
the world, by combinations of merchants, owners and ship¬
pers, needs to subsidize very little, if any at all, to drive
American ships off the ocean. The British ship to-day is the
best protected ship at sea. We should not delude ourselves
with a contrary notion.
When we had shipping of our own sufficient for our own
trade, our independence was REAL, and was reflected in our
government. British opinion had little influence. Becom¬
ing absolutely dependent on the British for vessels—even to
coal our navy on a cruise ("great world power" that we
might he, but are not!)—our shipping dependence perplexes
our presidents, disconcerts congress, and shames our people.
Why should we let this condition continue? Whj' should
Britain rule and we in thralldom live, subjugated by her
shipping power? Oh! that our government shall some day
have the spirit that actuated our fathers, who defied all for¬
eign opinion and legislated to place our .ships in trade on
every sea, where, under proper protection, the prestige of our
flag excited the national pride throughout the republic!
When that day shall come the republic will be rescued
from commercial thralldom, its foreign fetters will he
stricken off, American ships will be built and run once more,
and inde])endeuce on the sea, as on the shore, will reopen to
American enterprise a world-wide commerce now engrossed
by other nations.
As germane to this paper, the author submits the follow¬
ing resolutions:
SHIPPING RESOLUTIONS
^^TIEREAS, A ju'imary object of the union of the Ameri¬
can states, under the constitution, was the advantage to be
gained for the encouragement of navigation and the increase
of shipping and commercial power; and
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^^'IIEREAS, To this end, the constitution prov'''^'^s ample
authority in the power to regulate foreign trade, an nakes
tins <1 specific method for all industrial pursuits needing pro¬
tection, thereby prcchidiiig all other protective methods,
whether good or bad; and
Whereas, For forty years, observing the compact of
union, this method of constitutional protection Avas applied
to the merchant marine Avith great success, and, had it not
been suspended, Avould have continued its beneficial effects
doAvn to the present time; and
^^'IIEREAs, The adoption of an opposite policy, of free
and open transportation, Avith protection suspended, has had
the effect of gradually destroying onr carrying in the foreign
trade and A'anishing our marine from the ocean; be it, there¬
fore,
RcsoJi ed, That this congress is of the opinion that regu¬
lations of commerce—knoAvn in history as "discriminating
duties of tonnage and impost"—should be re-enacted by the
federal government aa'ithout delay, as by this method only
can the compact for "navigation Iuavs" be honored and ob-
sei-a'ed, and tlie marine be restored.
Resolved, further, That postal subsidy and general "ship
subsidy" are different things. The one is payment for ser¬
vices; tiie other is a treasury gift for no consideration. Agi¬
tation for ship subsidy is therefore a mi.stake. Its principle
is at variance Avith the spirit of our constitution—Avholly
foreign to it—and quite impracticahle as a method of encour¬
agement. At its best it only offers an inapt and inequitable
com pensai ion for non-proteel ion. A compensation large
enough for snudl a'essels aa'ould be excessiA'C and unjustifiable
for laipy ones. True protection acts effectiA'eiy to secure
einployinent, by equalizing fooling for competition for all
sizes of shi])s. Hhij) .subsidy takes no thought foi', and can
not secure, necessary emplo^unent; it onlj' adds to freight
money, if, by chance, RMRIjOYMENT shall be obtained.
Onr shipping has fled tiie ocean, not because freigiits Avere
too loAV, but mainly because no employment Avas open to
tliem, riA'al nations using devices to cause their idleness. A
kind of ])rotoction that Avill not act sharply and eff'ectnally
to .set foreign devices aside, and to make pvefevenec for em¬
ployment of American vessels, can b(> nothing but a nostrum,
sni'e to bring disaiApointment. l>nt the cost of ship subsidy,
Avcre it constitutional, ])racticable and successful, Avouhl
Avork its early abandonment. On the other hand, true and
ett"(H>tua] protection Avill cost the country nothing, aTid may
ha perpetual. Wileiaiu W. Bates.
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