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and I know the only way-quit spending. But can't France reduce?
Deficits can be disbanded by discharging the hordes of surplus office-holders and employees. To do that in several countries is a harder problem than to disband armies. Public improvements can be stopped. That will create unemployment. The problem is enormous and cannot be solved by a Genoa Con. ference; but the necessities can be emphasized. Let us hope for that much.
BY FREDERICK H. CHASE
TNCLE SAM has a stately fleet of obviously, but two methods of opera that openly advocated and used the sub
merchant ships, "all dressed up tion: the payment of subsidies or Gov- sidy idea, including mail, construction
and no place to go," while cable ernment ownership and operation. Be- and navigation subsidies, and fisheries reports state that the British Cunard fore the war seventeen of the great bounties. Line is about to begin the construction nations of the world were either wholly Holland paid liberal subsidies for car of 100,000 tons of new shipping, and is or in part committed to the former, while rying her mails at a given rate per voyalso about to revive services discontin the latter was an untried experiment. age, and this practical little nation ued on account of the war. The great Great Britain, as the leading ocean ranked eighth among the maritime naShipping Ball is on, and our ships are carrying nation, hid her subsidies under tions of the world. wallflowers. What prevents them from the title of “subventions," conveying the Austria-Hungary subsidized mail getting into the swirl of world trade? impression that she did not believe in boats, paid construction and navigation
This question is answered by those the former. She subsidized mail-carry bounties, and refunded Suez Canal tolls, who claim that competitors would not ing and other steamers built in accord while Hungary paid a direct bounty to accept our ships as a gift if compelled ance with Admiralty plans for quick Hungarian ships. to operate them under American laws- conversion into auxiliary cruisers in Italy and Spain subsidized mail boats laws which impose excessive operating time of war, and from 1840, which was and paid construction and navigation costs, which in turn demand high freight approximately the time when our ship bounties, while Portugal cloaked her rates and leave us with idle ships. ping had begun to disappear, up to 1900 subsidies under the guise of "mail sub
Any foreign sailor will admit that the she expended $283,000,000 on various ventions” to steamship companies. food, quarters, and pay are better on subsidies. When the Lusitania and the Norway and Sweden made both conAmerican ships; and yet the La Follette Mauretania were built by the Cunard tributions and loans to steamship comSeaman's Bill, no matter how good its Line to take the speed record from the panies, and Norway, in addition, granted intentions, only increased the cost of German liners, the British Government trade subsidies. Denmark's subsidies operation, without providing any means loaned the money on terms which made took the form of trade subsidies and of meeting the increase. it practically an outright gift.
exemption from harbor dues. The La Follette Bill further requires Most of England's colonies granted di- Russia paid mail and mileage subsithat seventy-five per cent of the crew in rect subsidies, and did not circumvent dies and assisted with Government each department must be able to under the act by “subventions."
loans. She also granted direct steamstand orders in the language of the offi- Canada granted mail and steamship ship subsidies and refunded Suez Canal cers, and that an average of fifty per subsidies, and also paid fisheries boun tolls. cent of the crew shall be rated as able ties. A line of boats plying between Japan extended direct state aid to seamen. As a contrast with these re Montreal and Africa received $5,000 per steamship companies, granted mail subquirements, when an English ship ar boat each trip from both terminal coun. sidies, paid coast, navigation, and fisherrives from the Orient her crew is com- tries, and yet an average of seventy peries bounties. Even China granted state posed mainly of Chinese coolies, while cent of the freight shipped from this aid to steamship companies and subsiAfrican ships, even to oilers and fire- end was American made or grown. Can- dized her shipyards. men, are manned principally by African ada believed in carrying Canadian goods Chile allowed mail subsidies, and Negroes. No American seaman would in Canadian ships. She did not worry Brazil and Argentina have even subsisubmit to such food, quarters, and pay over this subsidy to deliver American dized foreign steamship companies. as are provided for such crews, which goods. Her foreign trade was growing, Uncle Sam subsidized a few mail. are recruited from the cheapest ranks and would some day require the entire carrying ships, but the great bulk of our of labor on earth. Real Americans will cargo space of her ships. In the mean enormous foreign mail and commerce not expect him to do so, or be willing time Uncle Sam's freight bills were a was carried in foreign bottoms. that foreign crews should man our ships. big help in the cost of operation.
In 1826, when our shipping reached In times of trouble, like the recent Germany paid mail and other steam- its maximum strength, our vessels carWorld War, we want the feeling of se- ship subsidies, besides granting to her ried 95 per cent of our imports, and curity which comes from the knowledge shipyards preferential rates on her Goy- 89.6 per cent of our exports. Until 1830 that our ships' crews are Americans. ernment-owned railway for ship-building the American ship-owner had the advan
If it is fair to conclude that we want materials. When she first entered the tage of preferential duties. our great fleet of vessels to become a ocean carrying trade, she bought ships. In 1861 our foreign commerce permanent American Merchant Marine, In a few years she competed with the amounted to $508,864,375, with an manned by Americans working happily world in building them.
American tonnage of 2,496,894 tons. under American conditions, there are, France was one of the few countries In 1905 our foreign commerce had
increased to $2,636,074,737, while our
abolish our Post Office Department when ship tonnage had decreased to 943,750
it shows a deficiency? tons.
Our foreign commerce is a rich prize We have seen that the leading na
for the carrying nations of the world. tions of the world believe in and prac
The great international game of chess is tice the granting of subsidies in one
on, and our opponents will try to check form or another.
every move we make. Even with our Under our present tariff system, the
great tonnage of new ships, backed Government grants a “regular, allow
either by subsidies or Government opance" to our manufacturers and farmers
eration, can we hold our own in the as a protection against foreign pro
game? In a commercial sense, it has ducers, which "allowance" is supposed
been many long years since American to be reflected in the higher rate of
ships enjoyed "the freedom of the seas." wages paid to American labor. A higher
Prior to the war the ocean trade of cost to the consumer naturally follows,
the world was controlled by the lines of making each one of us a supporter of
a few nations through verbal and writ. this subsidy.
ten agreements, the former known as Subsidy bills have been defeated in
conferences. By these lines the high seas Congress on the ground that they gave
were arbitrarily divided into a Mediterdirect grants to "special interests." The
ranean, a Continental, a North Atlantic, National Association of Manufacturers
and various other Conferences, each is certainly a pretty healthy combina
mutually pledged not to encroach on the
Photo by Fred II. Rindge, Jr. tion of "special interests," and is keenly
waters of the others. on the job whenever Congress proposes
Six German lines formed an organizato tinker with its tariff subsidy.
Trisn't often that E. V. Lucas ap
tion known as the Syndikats Rhederer, When our transcontinental railways
I pears in the role of an indignant which maintained four small steamers were building, the Government encour citizen. His whimsical observations ready at all times to crush rivals by aged them with liberal land grants on men and manners have accus sailing from the same port at the same land belonging to the people, now worth tomed the public to think of him as time and cutting rates. an enormous money equivalent and con
a keen but sympathetic observer of
In South America control by England stituting a direct "gratuity."
the world and his wife.
and Germany was made effective through We expend millions annually to im
In his article on the Spanish bull
a system of rebates on all goods shipped prove our rivers and harbors, and subsi
by their lines. American ships found it
fight, which will appear in an early dize the users of the same by exacting
difficult to secure a return cargo from
issue of The Outlook, he has drawn no tolls. This is also true of our inland
South American ports. The English and canals.
the glove from his hand. But his
German lines paid the rebates at the end The Agricultural Bill usually calls for
ungloved hand wields bis pen as of the year, and for one offense in shipmillions of dollars each year, and money skillfully as when it writes in a less ping on an American vessel the shipper is freely appropriated when the South trenchant mood. For vigorous de would lose all accumulated rebates. faces the cotton-boll weevil, when the scription, vividness of utterance, and The English and German Conference West must fight the cattle tick, or some
narrative power we commend to all
lines also maintained service between other section the hoof-and-mouth dis
our readers his forthcoming article:
South America and Europe, and under ease.
the same rebate agreement. A South A prominent Indiana banker once told
American shipper would lose all accrued
WHENEVER I SEE me that he didn't care what nation car
European rebates by shipping one ried our commerce as long as it was
America-bound cargo in an American
A GRAY HORSE carried. He is but one example of why
bottom. This was a pretty hard nut for we lack the necessary "pull together"
us to crack, for, while we might prohibit spirit. Too much take, and too little
rebating on all ships entering our ports, give.
Fisheries bounties made Gloucester, the English and German lines could Free raw materials is a special privi. Massachusetts, the fishing port of the hold the carrying trade between South lege or subsidy to those manufacturers New World and furnished the hardy America and the United States by needing such materials.
sailors for our early merchant ships and doubling the rebates on shipments from Churches and other religious institu- navy.
South America to Europe. tions, when exempt from taxation, enjoy Our merchant marine seems to be The captains and deck officers of for. a subsidy, and we all help pay it about the only exception to the general eign carriers are naturally partial to the whether or not we approve of the ex- rule of granting subsidies, bounties, or interests of their own countries, and are emption. One-seventh of New York gratuities to privileged properties, pro- trained to promote the market for home City's real estate pays no taxes, without prietors, or persons.
goods. asking grace of the other six-sevenths. There is considerable to be said in Finally, we must consider the relative
Cheap Government water for irriga- favor of Government ownership and cost of building ships here and abroad. tion purposes, as an inducement to set- operation, but we must bear in mind If Uncle Sam elects to stay in the ship tle on arid lands, is a direct subsidy, that on the ocean we are competing with ping game as owner and operator. he bounty, or gratuity. The Homestead every maritime nation of the world—a can't expect to charge higher freight Laws, which gave away our public lands competition much more complex and rates than his foreign competitors in for little or nothing, were the applica- exacting than that between domestic order to justify the excessive cost of tion of the subsidy on a tremendous utilities, and perhaps requiring the building. Unless he can reduce these scale, and resulted in the phenomenal initiative and vision of private operators excessive costs, the difference will have growth and development of what are financially interested in the ships; how to be charged off against preparedness now our great grain-growing States. ever, we score a point for Government or the public welfare or something else
Mail subsidies, or subventions, as ownership if we divest our minds of Commercial sea power is the great some call them, are nothing but direct the opinion that all Government enter- prize of the world to-day. It was early subsidies. If the amount paid is in ex- prises must show a profit. The Public won by the prowess of American ships cess of the regular rate on so much Health, the Revenue Cutter, and the and then surrendered with hardly a freight, it becomes a gratuity or grant Life-Saving Services are indispensable, struggle. to a "special interest."
and yet yield no profits. Should we For many years following the coming
of the steel screw-propelled ship we of American ships, maintain a large We must have a sufficient foreign marseem to have lost sight of the fact that number of shipyards on repairs alone, ket to absorb our surplus production, the day would come when our virgin re- especially stimulate the iron and steel and there will never be any certainty of sources would develop far beyond local trades and all other trades allied to our getting it as long as we depend on consumption, and that we would become ship-building, employ thousands of the other fellow to deliver our goods; an export nation on a scale undreamed American sailors whose wages would furthermore, American ships should of. A few years ago ex-Secretary of the support American homes, and, finally make every dollar to be made in deliverTreasury McAdoo stated that $300,000, and of most vital moment to our own ing this surplus and bring to American 000 annually was paid to foreign steam- internal peace, American ships would be producers the colossal advertising value ships for carrying our commerce. This a big factor in insuring regularity of of sending the Stars and Stripes into all sum ought to support a magnificent fleet eniployment in American industry. the ports of the world.
II-A FREE TRADER WILL SURRENDER TO FACTS
BY GEORGE HAVEN PUTNAM
PRESIDENT OF THE FREE TRADE LEAGUE
MEASURE is now pending under at least for the welfare, of the State, sufficient to cover the ordinary business A which a substantial appropriation and further proof that the industry can- risks, say fifteen per cent, should, as was It is to be made from the Treasury not be maintained, or possibly cannot be done in the case of the war industries --that is to say, by the taxpayers-to established, without help from the referred to, be paid into the National provide a subsidy for the maintenance State--that is to say, from the tax- Treasury. and the development of American ship- payers. They should then be called Further, irrespective of the term for ping.
upon to state what amount of co-opera- which the subvention had been given, Those who are believers in the impor- tion or support from the taxpayers will the managers of these industries would tance of freedom of trade among the be required to put their industry on an be at liberty, whenever they wanted to nations, on ethical as well as on eco- assured foundation and to enable its free themselves from the Government nomic grounds, may properly object to operations to be carried on. The com- inspection of their books and from the any use of the money of the taxpayers mission having accepted the view, after necessity of paying over excess profits for the promotion of one business inter- examining the evidence, that the indus- or proceeds beyond a certain fixed rate, est or another.
try is to be classed as "essential," and to resign the subvention and to give up If there is to be any contribution from having arrived at an estimate of the or get rid of the inspection and the paythe taxpayers for the support of an indi. amount of the subvention required, ment of excess profits. vidual business interest, or of a group of would recommend the payment from the The schedule of the assisted indus. such interests, free-traders for the most Treasury of the amount decided to be tries should be a matter of public recpart take the position that a subsidy is necessary—say, five million dollars or ord. Every citizen would be in a posithe least objectionable form for such ten million dollars.
tion to know what manufacturers or contribution. A subsidy makes provis. The amount so paid would be a mat producers throughout the country had ion for a specified payment, the amount ter of public record. The taxpayer taken the position that they could not of which payment is a matter of public would know which were the industries carry on their business without help record. The taxpayer is in a position to that were securing in this way the help from their fellow-citizens. know what is to be the payment from of the taxpayers. Every citizen could Payments of this kind, which are a his own pocket and for what the money know what the money was being used matter of public record, payments to is to be utilized. for.
be classed as subsidies or subventions, We hold, however, that the burden of We consider that a subsidy, made a are, in my judgment, infinitely prefproof rests very decidedly upon the busi.. matter of public record, is very much erable to the hidden assistance in the ness concerns, or groups of concerns, preferable to assistance given in the form of tariff duties, because, while they which make application for such sup- form of a tariff or duty. A voter very do constitute a burden upon all of the port from the Treasury-that is to say, seldom can know what amount the coun consumers and upon all of the taxpayers from the taxpayers—to show that their try is called upon to pay, and in the in the country, the precise extent of the industry is absolutely essential for the end the individual citizen is under the burden or the amount secured by one safety, or at least for the welfare, of the necessity of paying, for assistance given favored trade or another can be known. Nation, and to prove further that such to an industry in the form of a tariff. The makers of the tariffs do not inindustry cannot be established, or can Provisions in the tariff are, in fact, not tend that the extent of the tariff bus. not be maintained, without help froin infrequently framed so as to make such dens should be known. the taxpayers.
knowledge difficult to understand. The If the interests that are now pressing It is possible to believe that there are amount of the contribution is hidden, for a ship subsidy can make clear to the certain industries (the number of these and is meant to be hidden.
members of an impartial convention is, in my opinion, at best restricted) A commission, under my suggestion, that such subsidy is "essential,” that which may be called "essential" for the would recommend that the subvention the ship-carrying trade is essential for welfare, or possibly for the safety, of should be limited to a term of years the welfare of the Nation, and that the State.
say a period of five years—which might, Americans cannot conduct this business I have suggested, looking at the mat with sufficient evidence presented as to without aid from the Treasury (i. C., ter from the point of view of a free. the necessity or advisability of such ac- the taxpayers), and if a subsidy is made trader, that the concerns, or groups of tion, very probably be renewed for a for a limited time, subject to the condi. concerns, which are carrying on such further term.
tions above proposed, I, as a free-trader, industries, or which want to establish During the years in which a business would not be prepared to oppose the such industries, should be called upon was receiving this help from the tax measure. to go before a commission (a commis payers the accounts should be open for The voters will be in a position to desion which should be entirely outside of the inspection of representatives of the cide whether the subsidized industry is politics) and submit proof that must be Treasury, as was done during the years of sufficient advantage to the country to accepted by the commission as adequate, of the war with certain "war indus- be worth what it costs, and how long first, as to the importance of their in- tries." All proceeds secured by the the taxpayers should continue to provide dustry or its necessity for the safety, or business beyond a certain percentage the money.
KING CARNIVAL LEADING HIS PROCESSION AT NICE, FRANCE
The great carnival at Nice, which annually attracts thousands of pleasure-seekers, has again been ushered in as of old. Here we see H. R. H. King Carnival proceeding down the Avenue des la Victoire, acclaimed
by his subjects
A PEACE EXPOSITION IN TOKYO,
A NEW RESIDENTIAL
This tract, it is stated, is typical of many that are now being laid out in San Francisco. These new residential sections are easily reached from the business center by means of the new Twin Peaks Tunnel, which is over two miles in length
Here are some of the buildings in one of Tokyo's parks which are to house the Peace Exposition which will be held there from March to August, in celebration of the ending of the World War. The lake will be used for a series of floating exhibitions.
The United States is reported as leading in the number of exhibits and the amount of space allotted to merchants and manu