has the indefeasible right of self-defense against fellow citizens who compromise the safety of his harmless shipments by placing in the same bottom clandestine shipments of contraband. The United States government can connive at, and even assist, an arrangement according to which the shipper, say of cotton, to a German port or to Germany via a neutral port shall not be imperiled. In other words, it can supervise the loading of ships and the papers of ships destined for such ports, and thus greatly increase the difficulties of contraband trade. This there is good reason to believe it is preparing to do to the satisfaction of all parties.

But speculation is futile. Much is bound to have happened before this paper can appear in print. All that can be done at present is to give some sort of idea of the controversy as it stands. The thing which it seems to the writer most important to remember is that the controversy is not one of law but of adjustment. It was inevitable that in these days of cosmopolitan economics the United States should be the innocent victim of the delirium of Europe. It was perhaps inevitable also, in view of the chronic reluctance

1 It was received by the Atlantic on the 9th of December last. - THE EDITORS.

of the Anglo-Saxon political mind to face squarely the possibility of war, that both the United States and Great Britain should have been taken off their guard and should have had to bring up to date their contraband codes amid the clash of arms.

Be that as it may, the necessity has arrived; and one cannot be too thankful that the principles of their codes are the same. Had it been otherwise; had the United States, for instance, taken the same aggrieved stand about the British invocation of the doctrine of the continuous voyage that was taken by Germany, when during the Boer War German ships carrying munitions of war to Delagoa Bay were seized on the ground that their cargoes were really meant for President Kruger's army; or had Great Britain tried to declare provisions contraband, as France did in her war with China in 1885, or provisions and even cotton and other things, as Russia did at first in her war with Japan, then indeed there would have been a large loophole for serious misunderstandings. As it is, one likes to think that only some very untoward accident or some egregious diplomatic blunder, or both, could create anything like dangerous international tension.

I

THE subject of a merchant marine, though frequently discussed, can hardly be said to have been a burning question until within a few months. It is probable that a year ago the average manufacturer and farmer of the interior would not have thought the matter one of direct interest to him. So much of the grain raised by the one or the products manufactured by the other as was sold abroad, seemed to find ready means of transportation across the sea. Those who gave the subject casual thought were wont to say that our money could be more profitably employed in other directions, and that the foreigner was a willing servant who would always put his capital in ships at our disposal, while our money was better invested elsewhere. There were those, indeed, who saw that our transportation systems ended at the sea, and that there were, so to speak, no terminal facilities for them under our own control beyond the water front. The situation was not unlike that which would have resulted had the railway companies terminating in Jersey City been obliged to reach New York by ferries and lighters under separate control, indeed, under a control which not only was separate, but might through a difference of interest become at any time antagonistic.

It is not so many years since foreign trade was more of a name than a reality to a large portion of our people. A certain atmosphere of disapproval too was

inevitably thrown about importations by an economic cult which taught that everything imported meant an injury to American workmen; and the same theory had for its corollary the fixed belief that we could not compete with the foreigner on our own ground but needed protection against him, and by so much the more we could not compete with him on his ground or in markets where there was no preference. Hence the export trade was naturally regarded by many, so far as manufactured products were concerned, as at least as much of a dream as a reality. Even today there are manufacturers among us who are with difficulty shaken from the conviction that they cannot compete with the products of their kind made in other countries, and, since they believe that they cannot compete, seem quite unwilling to try.

It was not easy to arouse interest in a mercantile marine under the American flag in an atmosphere in which imports were thought an economic mistake and large exports of manufactures deemed impracticable. Yet as the proportion of food-products in our exports diminished and we became less and less the granary of Europe, and as exports of fully finished manufactures grew until they became the largest item of the largest export sales that we ever made, it was inevitable that there should come in time a dawning consciousness that there was a weak spot in our transit facilities. At the same time, however, that the need for transporting our manufactures to foreign markets grew,

the demand for exporting agricultural products to those same markets diminished, and thus the interest in a merchant marine was but little enlarged. It would not be right to overlook, still less to undervalue, the efforts of those who have long maintained that a merchant marine under the American flag is essential to our full commercial development. Some there are - let due honor be given them-who have raised their voices in season and out of season in this good cause. But even they will agree that until a few months ago they were as the 'voice of one crying in the wilderness.'

Long the great fabric of our commerce pursued its course, depending, almost without our thinking of it, upon the facilities for ocean transit furnished by those who were competitors in the same markets in which our goods were sold, and whose interest might at any time change them from the indifferent attitude of carriers for hire of our goods, either to a hostile point of view, or to one in which we were left out of the account.

How suddenly this all changed with the early days of August last is now history. At once, as by a revealing stroke, two great weaknesses in our foreign trade burst plainly into sight,

the financial weakness and the shipping weakness. Our foreign trade, it is true, had grown to a total of over $4,200,000,000; and nothing speaks more strongly for the competing power of America than the fact that exports were much more than half this total, although we lacked those elements in export power which our great commercial rivals possessed in abundance. Coming last and with the poorest exporting equipment into the foreign field, we became a great power therein,

to deal. Yet our export trade, so necessary for the full movement of our industries, so essential to the prosperity of our farmers, lacked financial facilities abroad and transportation under our own control. And lo! in August last the crash came, and our weakness became clear to us. In the early days of that month, wheat accumulated in large quantities in Galveston, and because the mechanism of exchange had temporarily collapsed, there was for a time some fear that our exports of wheat would be seriously hampered, to the great injury of the farmers of the central West. Even after the tension respecting exchange had relaxed, the movement of wheat would then have been accelerated had there been ships under the American flag to carry it. This last is true to-day. The nations which were at once our great competitors and the carriers of our goods entered into the effort to destroy each the commerce of the other, associating with them nations of lesser, but real, industrial and commercial importance. Each began to clear the seas of the ships of the hostile powers. At once American interests went by the board.

German

As this is written many ships lie idle in the harbor of Hamburg. Among them are three - two British and one German-loaded with cargoes belonging to many American business houses. Months ago some, if not all, of these American concerns paid in full for the goods which are thus detained. The cargoes for which our money has thus been paid are sorely needed by their owners, but the interest of those owners is of relatively small concern to the captors. For them the primary fact naturally is that two of the vessels are under a hostile flag, and the third will not venture out to sea for fear of capture. What boots it to them that the persons who own the goods that these vessels contain are suffering for lack of them?

What is the interest of America in this matter, that they should consider it? The American consignees of these cargoes know well by now the value of an American merchant marine. If these vessels had been under our flag, the cargoes for which American money was long since paid would long since have been delivered. Since the ships are under foreign flags, the fact that their cargoes have been bought and paid for by Americans is but an incident, not of essential importance to the belligerents; and so the American firms are without their money and their goods, and will be so until such time as the belligerents shall consent to some arrangement consistent with their own interests for the release of these cargoes.

The stringency in dyestuffs and cyanides has not been wholly a matter for pleasant thought to those who have needed these materials to continue their operations. The thought of our complete dependence upon a foreign nation for the necessary supplies for industry, while we ourselves possess both the materials from which these supplies are made and the knowledge how to make them, is of itself sufficiently unpleasant to an American. The position of him who needs these materials to keep his plant from closing is far worse. In mine and mill in many parts of the country there has been a realization of what this stoppage means. Such relief as has been obtained came in the form of a consent, on the part of the German government, to permit the shipment of a small quantity of dye-stuffs and chemicals by way of Rotterdam, provided that a vessel under the American flag was sent to receive them. This arrangement still stands, with the further restriction that the American ship shall on her outward voyage carry a cargo of cotton consigned to Germany. Here is a striking case of the insistence on the part of a foreign government upon the

use of an American merchant marine in foreign trade, shipments being forbidden unless they move in vessels under our flag.

As this is written, there lie in many harbors vessels flying belligerent flags which dare not venture from their hiding places. Coincident with this is such a demand for ocean shipping to carry grain and other exports that a leading financial journal says,

"The great drawback is the supply of ocean tonnage and the rates demanded. December boats are very difficult to get and January boats are scarce. As high as 21¢ per bushel has recently been paid from North Atlantic ports to Genoa, which is a record high price.' The same issue says: "Tonnage on the Pacific coast is becoming very scarce. It is reported that steamer tonnage is almost impossible to obtain. Export shipments of coal to the Mediterranean have practically ceased on account of the high prices. Urgent demand for steamers for December and January loading in several of the transatlantic trades continues, particularly for grain and cotton; but the scarcity of available tonnage and the almost prohibitive rates demanded by owners greatly restrict trading.'

This is in the transatlantic trade. The writer goes on to say: 'A fair demand continues for tonnage to the West Indies, South America, and for long-voyage accounts.'

The National City Bank of New York in its December circular says: 'Vessels carrying the American flag are in great demand and commanding high pay, being particularly wanted for the trade to German ports, taking out cotton and bringing in dye-stuffs, potash, and sugar-beet seed.'

It is evident now to all men that we lack control beyond our own waterfront of the means of transportation upon which our agriculture and our

VOL. 115-NO. 2

industries are dependent. We may not run our factories continuously on full time if our foreign trade is cut off. It is common knowledge that many which are running to-day would stop in whole or in part if transit across the sea were interrupted. That transit, however, we have not for long years controlled and do not now control.

The record shows our ability to manufacture in competition with the world in many lines; and it also shows that our farmers can, and in large part do, supply the needs of the world for food. We therefore possess the goods of both agricultural and industrial origin which the world wants and which we need to sell to the world. We possess better than any other nation the internal transportation lines which take these goods to the coast. There our advantages stop. The water lines, which form in a large sense the terminal facilities for our great railways, distributing the products carried by them from our ports all over the world, are in the hands of our competitors. They withdraw these vessels at their will, or because of their necessity, or through the act of some enemy. We suffer, but have been helpless. If a belligerent power wishes to destroy the ships needed to carry Kansas wheat, it will do so when it can, and Kansas has no redress. There are vessels of war eager to-day to get into the open sea and destroy thereon the commerce upon which we are at this hour dependent for the transportation of our great and growing export trade in manufactures and foodstuffs; and nothing we are able to do can prevent them.

All the world knows that so much American commerce is carried in British ships that this commerce is therefore necessarily largely dependent today upon the English and French navies for protection in the Atlantic, and upon the Japanese navy for protection

in the Pacific. A leading financial paper says, "The British navy has saved our export business.' Our commercial fortunes are thus linked, not by our choice, with those of others, and we share against our will in their war-hazards. The course of legitimate naval warfare directed against vessels carrying our goods may, quite without intent or desire on the part of any belligerent, work us serious injury. None of the contesting powers desire this any more than we do. All are friendly to us as we are to them. All are our customers to-day.

The situation is indeed of our own making. It is the normal outcome of lack of foresight. But it cannot with safety be allowed to continue. To end it as speedily as possible is an act of true neutrality and a plain duty. In a commercial sense, the risk to ships under our flag, whether privately or publicly owned, is no greater than the risk has been and may be to our goods under other flags, with the important difference that in the former case we have the conceded right to act in our own defense, whereas now we must accept our loss helplessly.

Any state of affairs which places the transportation of our commerce, during a European war, chiefly in the hands of one side in such a contest, is both humiliating and hurtful. It makes real neutrality of spirit and of practice more difficult; and it puts a belligerent who indirectly may do us harm, without so intending, in a false position, not of his fault but of our neglect. The practical importance of this matter appears when we consider that by the excess of exports over imports between September 1, 1914, and January 1, 1915, we paid in goods over $250,000,000 of our floating debt to Europe,

a payment necessary to our recovery from the initial financial shock of the war, but dependent in the ab