The Convention was called to order at ten o'clock a.m., by Mr. W. H. Stayton, the chairman for the session. Chairman Stayton: Mr. William Sulzer, Member of Congress from New York, and one of the very best representatives from that State, upon whom we have learned to rely for constructive and beneficial legislation, has been good enough to consent to address us this morning on the methods of restoring our national merchant marine.

I take pleasure in introducing Mr. Sulzer.

ADDRESS OF HON. WILLIAM SULZER

Mr. Chairman, Ladies and Gentlemen:

We all realize that there is a sentiment, growing stronger and stronger every day, throughout the country, in favor of doing something to rehabilitate our merchant marine. This is patriotic, eminently proper, and should be encouraged by every true American..

It is unfortunate, however, that many well-meaning citizens, who desire to see our ocean carrying trade restored to our own merchant marine, have little knowledge of the best and the easiest way to do it, or of the causes which gradually drove our shipping from the high seas and placed us finally at the bottom of the list of the world's maritime powers.

There is no man in this country more anxious and more willing to enact proper legislation to restore the American merchant marine than myself, but I want to do it honestly; I want to do it along constitutional lines; and I want to do it in harmony with that fundamental principle of equal rights to all and special privileges to

than we had one hundred years ago. In 1812, the United States, with a population of less than ten million, owned more registered tonnage for ocean carrying trade than the United States in 1912, with a population of over ninety million.

The American deep-sea tonnage in 1812 was over 1,200,000, and it is now less than 800,000; and, what is worse still, it showed an actual decrease of more than 6,000 tons last year. In 1812 American ships, flying the American flag and manned by American sailors, carried over 90 per cent of our deep-sea trade, and a great part of that of all the countries of Europe. To-day we carry very little of our own trade and practically none of other countries, notwithstanding the fact that we should be the foremost maritime power in the world.

It is a sad commentary on our growth and greatness that more than nine-tenths of our once great and powerful deep-sea fleet has vanished, and not one new keel for an ocean-going merchant ship is being laid to-day on either our Atlantic or Pacific coast; while the vessels of foreign nations throng our ports and monopolize more than nine-tenths of all our import and export commerce. The question of the hour is, how shall we restore the American merchant marine? What shall we do to place our flag again on every sea? What policy shall we adopt to regain our ocean carrying trade and revive our shipbuilding industry? There are several policies proposed by those who desire to restore the American flag to the high seas and to secure for our country its proper share of the world's ocean commerce; and, briefly enumerated, they are as follows:

First: Ship subsidies.
Second: Free ships.
Third:

Preferential duties.

Let us briefly discuss these proposed remedies in their order. I shall state, as succinctly as I can, without preju

dice, the merits and the demerits of each proposition; and I shall do so from a patriotic and not from a political point of view, because, in my judgment, the restoration of our merchant marine is purely an economic question based on patriotism, and rises superior to partisan consideration.

Let us come, then, to the first proposition, to wit, ship subsidies. In the light of the past, I think we can safely say that the American people are unalterably opposed to a ship-subsidy raid on the Treasury. A subsidy is a bounty, a bonus, a gratuity, and it never has succeeded, and it never will succeed, in accomplishing the purpose desired. All history proves it conclusively. Wherever and whenever it has been tried, it has failed. In my opinion, if a subsidy bill should pass, it would not restore our American merchant marine or aid our shipbuilding industries. It is a waste of time to talk about ship subsidies, and I believe every disinterested American who has studied the subject, is opposed to the policy. We might just as well pass a bill to pay a subsidy to every man who grows a bushel of wheat or raises a bale of cotton, as to pay a subsidy to the man who sails a ship.

I am now, always have been, and always expect to be, opposed to ship subsidies that rob the many for the benefit of the few. Ship subsidies do not build ships; they create ocean monopolies. Ship subsidies will not give workmen employment in American shipyards; the money taken without justification from the Treasury of the people will simply go into the capacious pockets of the men who own the ships now in commission. Every scheme of this kind simply permits respectable corruption and benefits the few at the expense of the many. The principle of ship subsidies is inherently wrong, absolutely indefensible, and no man who understands the question can justify the policy in the face of the facts.

The taxpayers of our country, burdened now almost beyond endurance, are opposed to ship subsidies. They are opposed to any gift bill. They say no private business should be aided by direct grants from the Treasury. Ship subsidies are subversive of the eternal principles of equality, contrary to the theory of our institutions, of doubtful expediency, and at war with the spirit of the Constitution. Congress has no power to subsidize any trade, on land or sea, at the expense of the taxpayers of our country. Any attempt to fasten this odious system of ship subsidies on the legislative policy of the country is undemocratic, unrepublican, and un-American.

And now let us discuss the second remedy,— to wit, free ships, by which I mean the right of an American

citizen to build or buy a ship anywhere, give it the benefit of the American registry laws, and place upon it the American flag. To bring this about, all that it is necessary to do is to repeal the prohibitive law, which is a blot on our common sense and a disgrace to our maritime intelligence; but this can never be done while the believers in protection for the sake of protection can prevent it. There's the rub.

This policy of free ships has been advocated for years. by many able and patriotic men who thoroughly understand this shipping question and deplore the loss we are sustaining every year by reason of the elimination of our merchant marine.

What a spectacle is presented, when we realize that by virtue of our existing navigation laws the American who builds or buys a ship in a foreign country is an outlaw. - prevented from giving the vessel American registration and compelled to sail the ship under the protection of a foreign flag.

Now let us take up the third proposition, — namely, preferential duties in favor of American-built ships and against ships flying the flag of a foreign country. This was the policy so successfully in operation in this country up to 1828, when, to please foreign interests, the law was suspended, and from that day to this our prestige on the high seas has been declining, until it is less to-day than it was a century ago.

The true friends of our merchant marine confidently assert that if this preferential policy of the fathers was restored, it would revive our overseas carrying trade, and in a very few years build up our ship industries so that we would again secure our share of the ocean commerce of the world and save millions and millions of dollars that we pay annually to foreign ship owners. In reading the report of the Merchant Marine Commission, I observe that several of the largest shipbuilders testified that they formerly believed in subsidies, but had changed their opinions and now advocated preferential duties. The difference between a subsidy and preferential duties is about this: We must pay the subsidy; the foreign shipowner pays the preferential duties.

There seems to be but one objection, so far as I can learn, to a return to preferential duties; and this objection comes from the advocates of ship subsidies, who declare that we have commercial treaties with foreign governments containing the favored-nation clause, and, in order to inaugurate the policy of preferential duties, it will be necessary to change our commercial treaties, and this cannot be done without giving these favored nations one year's notice.

This objection, however, is more apparent than real; for there is no doubt the change could be made if this government wanted to make it, and a year's notice to bring it about would cause no great delay, especially when we consider that nothing has been done for our deep-sea shipping in more than a quarter of a century.

If we desire to change our commercial treaties with these favored nations, we have a perfect right to do so, and no nation can object. If there be retaliation, two can play at the same game, and our trade is more important to other nations than their trade is to our country. As I have said, many citizens and several distinguished members of Congress who have given this subject much thought and consideration believe that preferential duties will effectually solve the problem in the most feasible and practical way.

It is my candid opinion and I have no hesitancy in saying so that, if we had continued the policy of the fathers and not suspended our early preferential duty laws, we would to-day be the greatest maritime nation in the world and our flag would be on every sea and our ships would be carrying the commerce not alone of our own country, but perhaps half of that of all the other great nations of the world.

For years, in Congress and out of Congress, I have been advocating honest and intelligent legislation to restore our merchant marine; and for years the men in control of Congress have turned to my appeals a deaf ear. In this Congress I have again introduced my bill for It is a short bill, and reads as preferential duties. follows:

That a reduction of five per centum ad valorem of the customs duties now or hereafter imposed by law shall be allowed on all goods, wares, or merchandise imported into the United States in vessels of the United States.

That means this: that all goods, wares, and merchandise coming into the United States in American ships. shall pay five cents on the dollar less than goods, wares, and merchandise coming into the United States in foreign ships. What shipowner wants a greater advantage than that? This preferential duty is far superior, as a permanent remedy, to any ship subsidy. Let me tell you that a foreign ship came into New York from Brazil several months ago, that had aboard a cargo valued at $19,000,000. It was rubber, and rubber does not pay one cent of duty. Suppose that cargo had to pay a duty of five per cent on $19,000,000, if it came in a foreignbuilt ship, and not a dollar if it came in an Americanbuilt ship. There is enough money to build a ship on one

trip; and do not you suppose that men who have money and are looking for investment would be investing their money in American ships if there was a preferential duty law like this on the statute books? Of course they would.

You cannot get men with money to-day to invest in American ships, because they say it does not pay, and men will not invest money in any business that does not pay. Give our shipbuilding industries of this country an opportunity to interest idle money, and it will become immediately interested, and every one of our ship yards will be working overtime and there will be new ship yards built in every part of the United States where you can conveniently build a ship yard. That is the object of my bill, and I have discussed it with a great many men and have never yet heard a man say anything conclusive against its patriotism, against its policy, or against its effect.

I think that provision of the bill is clear to everyone here who understands our tariff laws and our shipping laws. In other words, this provision gives American ships a preferential duty over foreign ships of five per cent five cents on the dollar on all goods, wares, and merchandise brought into the United States. That is so great a preferential advantage that it would immediately compel importers to bring their products into this country in American ships. They would immediately begin to invest money in ship yards and build ships, so that they could bring in their goods in American ships and save five per cent. The American shipowners would, of course, be able to charge more freight than the foreign ship-owners, and the American importer would be compelled to patronize the American ship to save freight charges.

But I go further in my bill and say,

And in cases where no customs duties are imposed by law on goods, wares, and merchandise imported into the United States, there shall be levied, collected, and paid a duty of two per centum ad valorem if such goods, wares, or merchandise are imported in vessels not of the United States.

We have a tremendous free list, and it is getting larger all the time, and by reason of this circumstance Congress, in order to raise enough money to administer the affairs of the government, has to increase taxes on goods on the dutiable list.

No merchant bringing tea from the Orient, no merchant bringing rubber and coffee and cocoa from South America, - all of which are on the free list, - would bring those goods in foreign bottoms and pay a tax of

two cents on a dollar, when he could bring them into this country in American ships free.

[Reading:]

The said reduction of five per centum in duty herein provided for shall not apply to goods, wares, and merchandise not of the growth, production, or manufacture of countries contiguous to or bordering upon the territory of the United States, when imported into the United States by land transportation or land vehicles or conveyances through or from ports or other places of countries bordering upon the United States, if the same shall have been brought to such ports in vessels not of the United States; in cases where no customs duties are imposed by law on such goods, wares, and merchandise so imported, a duty of two per centum ad valorem shall be levied, collected, and paid. Said reduction of five per centum in duty shall not apply in cases where goods, wares, or merchandise are transhipped or transferred from a foreign vessel, port, or place to a vessel of the United States for the purpose of evading the provisions of this Act, and in such cases no exemption from duty shall be granted.

But I go still further:

SEC. 2. That the master, agent, or owner of any registered vessel of the United States shall be exempt from the tax of four dollars for every alien entering the United States on such vessel prescribed by section one of the Act of February twentieth, nineteen hundred and seven, entitled "An Act to regulate the immigration of aliens into the United States."

You know that these great trans-Atlantic ships bring a million immigrants to the United States every year, and they have to pay to the government of the United States a head tax of $4 on every one. That is $4,000,000. That would nearly all go to the American ship owner. Here

is a great discrimination in favor of American ships and against foreign-built ships, that will help put American ships upon the high seas.

[Reading:]

SEC. 3. That the President shall have power, and it shall be his duty, to give notice, within ten days after the passage of this Act, to all foreign countries with which commercial agreements have been entered into making any provision or provisions which are in conflict with sections one or two of this Act, of the intention of the United States to terminate such agreement at a time specified in said notice, which time shall in no case be longer than the period of time specified in such agreements, respectively, for notice for their termination: Provided, That until the expiration of the period when the notice of intention to terminate hereinbefore provided for shall have become effective, or until such date prior thereto as the high contracting parties may by mutual consent select, the terms of said commercial agreement shall remain in force.

SEC. 4. That all Acts and parts of Acts in conflict with the provisions of this Act are hereby repealed, and that, except as

provided in the first and second sections hereof, this Act shall take effect and be in force from and after its passage.

This is the bill, and it is a simple measure. Why should we not adopt it?

So I say to the champions of subsidies, which at best are only a temporary relief, that we never can help our shipbuilding industries and restore our merchant marine unless we adopt the policy of free ships, or discriminate in some way in favor of our own ships and against foreign ships. The fact is, that we discriminate now, by law, against our own ships in favor of foreign ships. My plan is simply to reverse the situation. I sincerely believe that if my bill for preferential duties were enacted into law, the United States, in a few years, would become the mistress of the seas, and American ships, built in our own shipyards, would do all our own ocean commerce, besides a great part of the deep-sea carrying trade of the other countries of the world, without taking a dollar out of the pockets of the taxpayers of our country. My friends, let me say, in conclusion, that the policy I propose is not a makeshift. It is not new having been the law of our country from 1792 to 1828, when it was suspended, and that suspension was one of the greatest political blunders in all our history. It is not a temporary expedient. It is permanent. It has been tried and not found wanting. It is the easiest way to restore the American merchant marine. Adopted again as our policy and upon the statute books, it will never be repealed or suspended, but will speedily restore our ocean carrying trade; revive our shipbuilding industries; give employment in our shipyards to thousands and thousands of men in all parts of the country; bring about an era of prosperity such as we have never known before in our shipping trade and deep-sea commerce; place our flag on every sea and in every port; and make our seamen what they were in the historic days of the Republic the pride of America and the masters of the ocean highways of the world.

Mr. Lloyd: I move, Mr. Chairman, that a vote of thanks be extended the Hon. William Sulzer, by the Navy League, for the interesting address he has just delivered. an address showing deep thought and careful consideration.

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The League unanimously adopted the motion above made.

Mr. Sulzer: Mr. Chairman, and ladies and gentlemen: I am very much obliged to you, and I assure you that in the future, as in the past, I am going to work, in season and out of season, to place American ships upon the high seas, so that we can get our share of the overseas commerce.

ADDRESS OF MR. FRANCIS B. ALLEN
of Hartford, Conn.

Mr. Chairman and Ladies and Gentlemen:

I feel that it is eminently proper that the Navy League should take up this great patriotic question. I am sorry to say that I am not able to propose a remedy myself, but it is apparent, I think, that, through manipulation and otherwise, the word "subsidy" has become a scandal in our country. It is a stench in the public nostrils; and whatever we might do to stimulate shipbuilding, to stimulate the flying of the American flag upon the ocean, must be done by some other means. It is true that foreign nations pay subsidies; they largely subsidize their ships and are able thereby to obtain a great preference. As Mr. Sulzer has pointed out, what we need to do, apparently, is to make it to the interest of our citizens to invest in business where they can look for a fair return on the capital invested in the shipbuilding. We have a coast line of approximately eight thousand miles. Except in regard to naval vessels, we have not a flag on the ocean, and it is a great scandal and a great outrage. We are cheated of what properly belongs to us. Our Section of Philadelphia, some years ago, got out some post cards. which they circulated to their members and those interested, that showed, if I recollect the picture, Uncle Sam as a spectator and the flags of all the nations, but no vessels lying alongside the docks flying the flag of the American nation. We obtained a supply of those post cards and we sent them to the members of our organization and people of our locality that we thought would be in sympathy and appreciate the illustration given in that case.

Furthermore, at the time of the breaking out of the Civil War, our shipbuilding had not been destroyed to the extent that it is to-day. Perhaps we had fully half a million people engaged in maritime pursuits at that time. The people of our country are not in the same situation to-day in regard to shipbuilding. If we had a war today, - and we must realize that we must be prepared for it, and it is enunciated as the proposition of this organization that peace is to be assured by preparedness and not helplessness, we know that he who commands the sea commands the trade and commands everything. That has been repeatedly pointed out to us. It was pointed out in Congress, by one of our most eminent Congressmen of the great old Commonwealth of Massachusetts, years ago. In a speech, he said that it was a navy that gave Augustus the empire of the world; it was a navy that carried the Norsemen from the Polar circles; it was a navy that made Venice and Genoa the mis

tresses of the Mediterranean; it was a navy that prevented England's being crushed in her struggle with Spain in the 16th century, and that in the 17th and 18th centuries built up her great colonial possessions that girdled the world; and it is an absolute and essential necessity that we should have a navy as a protection to our seaboard.

So, I think that we ought by all means in our power to further a proposition of that kind. I believe that we need to consider the services rendered by Patrick Henry, in his great speech in the Virginia House of Delegates, in which he called attention to the fact that you "May cry peace, peace, but there is no peace," and went on to enunciate why that was the case.

This is not a question of party; it is a great question of patriotism. Patriotism is not a glittering promise, but it is a whole-souled necessity of our nation; so I believe that it is proper that a great organization like this, with the possibility that it commands, should take up this great subject and bring it to the attention of the people of this country, so that we may understand it; and I think we are greatly indebted to Mr. Sulzer for calling our attention to what he regards as the necessary thing to do to accomplish what we seek, and certainly in the many years he has been in Congress he has done his utmost to stimulate all efforts looking to the encouragement of a mercantile marine.

The Chairman: Undoubtedly it is within the scope of the Navy League to do all that it can to bring about an increase of our merchant marine. In a general way, yesterday was devoted to questions devoted to naval vessels. To-day is to be much more largely devoted to the question of the vessels in our merchant fleet. Following suggestions made yesterday, we will to-day proceed broadly into the matter, and get such consideration as we can. The question under consideration to-day really is so closely connected to the question as to what we shall do in building up our navy, that it may well be said to be collateral to that question.

Now, the fact is, that we have built the Panama Canal. It is nearly finished, and is, as Mr. Sulzer says, the greatest work of the ages. We have removed mountains, and we have not only overcome the physical obstacles, but we have overcome that more intangible thing - the fever. In fact, it is said now that there are less who die in Panama than there are people who are robbed in taxicabs in New York City.

Therefore I think it is entirely proper that we should hear the views of gentlemen who have studied the question, and if, at the conclusion of their discussion, you feel like putting yourselves on record, either for or against tolls, or in favor of discrimination in tolls, that is a question for you to decide, and it will probably be submitted at the close of the meeting.

In the meantime, the Honorable Mr. Humphrey from the Pacific Coast, who has studied this question and who has studied the question of free ships with a great deal of care, has con