No. 77.
Mr. Seward
to Mr. Evarts.
Chefoo, June 29, 1877. (Received August 18.)
Sir: I have the honor to hand to you herewith a letter which has been addressed to me by Messrs. Russell & Co., Frazer & Co., Olyphant & Co., Fogg & Co., Purdon & Co., and Farnham & Co., of Shanghai, who represent in effect all American commercial interests in China, in regard to the difficulties imposed upon them by the law which requires that the masters and officers of American ships shall be citizens of the United States.
These firms declare that “for many years it has been difficult to secure American officers for American vessels trading in these waters.”
It is a matter within my knowledge that during the period of my [Page 113] charge of the Shanghai office, from 1862 to 1875 inclusive, the rigid enforcement of the law in question would often have forced the owners or agents of our vessels engaged in this part of the world to lay up their ships or to transfer them to other flags. I have transmitted to the Department evidence that this condition of things has continued to the present time, and I agree with the writers of the inclosed letter in believing that the supply of American officers will be insufficient hereafter, although perhaps in a less marked degree.
Under these circumstances it would be well, in my opinion, to provide that whenever a consul is satisfied that an American master or officer, or officers of suitable character and qualifications cannot be procured by the owners or agents of any ship then being ready for sea in a port of his jurisdiction, he may allow a foreigner or foreigners to be shipped in the vacant place or places.
I may remark that the leading maritime country of the world, England, places no restriction whatever upon the employment of persons not British in her mercantile marine. I have never heard of any embarrassment resulting from their legislation, although their laws for the protection of seamen and of maritime interests generally are in all essential respects more strict than ours.
It may be said again, that our laws have already been changed somewhat in the direction of greater liberality. Formerly two-thirds of the mariners engaged on any vessel were to be American. This restriction has been removed, to the great relief of all interests concerned.
And again, the engineers of steamers hold places scarcely second in responsibility to the masters and mates. There is nothing in our laws, which, indeed, were framed before the day of steamers, requiring that they shall be citizens of the United States. If we can trust to foreign engineers, it is not evident why we cannot trust to foreign officers.
In my opinion, in fact, it would be well to allow ship-owners to engage masters, officers, engineers, and men alike in the open market, free from all restrictions of nationality. But as this is likely to be considered too liberal, I have suggested instead such legislation as would give a measure of relief without seeming to depart from the main object of much of our legislation, that is to say, the “protection” of the industries of all classes of our citizens. I think it well, nevertheless, to give expression to my views on the general questions involved.
Out navigation-laws provide, in effect, that no vessel can enter into trade under our flag, which has not been built in our own country. They require further, as we have seen, that the masters and officers of all our ships shall be Americans. This is called the “protection” of our shipping interests.
It is manifest, however, that it is not “protection” of the interests of the owner, but only of subordinate interests. The ship is built, not for the profits which the building gives to the shipwright, (that is a minor object,) but for those which the owner can make by her use extending over many years of time. So she is not sent on her voyage because the master and officers need employment. They are engaged to subserve the owner’s interests, and they look to him for their pay.
It is manifest again, that whenever the employment of a vessel takes her on foreign voyages, she goes where she has to compete with the vessels of all the world, and that “protection” for ship-builders and crews, means practically discrimination against owners.
There was a time when wooden ships were doing the carrying-trade of the world, and, as we could build and man such vessels as cheaply as any other people, the unbounded activity of our countrymen won for us a [Page 114] prominent position in navigation. Then came the period of iron steamships, and, as these could be built and, handled by others more cheaply than by us, our shipping melted away like dew in the morning. It is idle to blame Confederate cruisers; the result would have been the same if never one of them had left port.
It would seem that the time is approaching when we can build iron steamers as cheaply as can be done abroad. But this alone will not put us on a par with the rest of the world. A steamer is an article of merchandise of a very expensive sort, whose value, however, does not depend so much upon the matter of cost, as of the use she can be put to. It may happen that acres of steam-tonnage may be lying useless in the docks of England, and the whole fleet of a great company be thrown out of employment as a result of vicissitudes of commerce. How, under these circumstances, can the American who is compelled to purchase his vessels in a limited market, compete on the high seas with those who are free to buy wherever they can do so to the best advantage?
A commentary on our legislation is afforded by the fact that an American company is today running a line of steamers across the Pacific Ocean under the British flag.
I write not without personal experience of the effect of our laws, and more particularly of a result which has grown out of what our legislators would perhaps consider a failure of legislation. You are aware that it has been held that our people are entitled to the protection of our flag for ships purchased by them, it matters not where, and that while they cannot engage with them, in the home trade, they can use such vessels on all routes which do not touch our territory.
It has happened in this way that Americans resident in this part of the world have enjoyed free trade in ships and have found it possible to enter successfully upon steam-navigation. It was only the other day that a fleet of twenty steamships which had been wearing our flag for a decade and a half was sold to a native company operating under the auspices of the government. Two or three of these vessels were of American origin; the others were purchased in the open market or built to order in England. If the company which owned them had been obliged to buy or build in America, their enterprise would have failed at a very early moment.
This chapter of the recent history of maritime enterprise is well worthy of the attention of Congress, and I hope that it may be thought appropriate to study the facts and lessons involved. The founder and constant patron of the company in question, Mr. Edward Cunningham, is now resident at Boston, and his evidence and that of his associates can be easily procured.
There is only one argument against free trade in ships which has seemed to me to be worthy of consideration. It is said that if our people are allowed to buy their vessels abroad we shall have no ship-yards at home, and the art of ship-building will be lost, to our misfortune in peace and war. To this I should respond that there is no occasion to throw our coasting-trade open to foreign or foreign-built vessels, and that it is sufficiently extensive to form, at least, a nursery for our building interests and a resource in case of need. But, if it be true that our shipyards cannot compete with foreign yards, it follows that vessels built in them cannot compete with those built abroad, and that we must abandon the yards or the shipping, with the certainty that if we do not abandon the yards we shall have neither ships nor yards, excepting those which are needed for the coasting-trade or for subsidized lines.
[Page 115]I do not know one person, calling himself an American, who, upon entering a foreign port, does not look around for the flag of his country displayed from the shipping in harbor. Yet, how little interest do legislators take in the question, and when they do approach it, with what cumbrous devices do they propose to remedy the present unsatisfactory condition of things. Subsidies, bounties, and discriminating duties are talked of, and the simple and only effectual measure, free trade, is lost sight of. Meanwhile, commerce languishes) we wonder for what reason, and every one else wonders why we do not see the reason.
The question, however, is not merely sentimental, and the evil results are not measured by the decrease in the number of ships. Many interests suffer in consequence.
The protection of our manufactures has put them now in such position, it is said, that our cotton-spinners, for instance, could compete in the more distant markets of the world if they had suitable opportunities for the shipment of their goods. Away from England, in all directions, run the steamship-routes which have been occupied by her people.
There is a departure for China, via the Suez canal, nearly every day in the week. Open competition has brought down the rates of freight to a very low point. Capital follows the course of trade, and banking facilities of the most extended sort are at the command of shippers. So it happens that while we are making cotton goods as cheaply, perhaps, as the English, we cannot put them on the markets of the world. It will be the same with other manufactures.
It is no doubt true that our unstable currency and the high prices of money, material, and labor, which have prevailed with us, have been the chief agents affecting unfavorably our foreign trade. But it will be a mistake to suppose that with more satisfactory conditions existing in these respects we shall readily attain to a satisfactory position in commerce. At best we must work in opposition to countries (notably Great Britain) which have established their hold upon foreign markets, and can be defeated only, on what has become their own ground, by the most skillful and careful management.
Adherence to our present navigation-laws under these circumstances may defeat in whole or in great part the foreign enterprises of our people, leave us in the humiliating position of having no vessels to carry our products abroad, or to bring to our shores those which we purchase abroad, and preclude the hope of that general participation in commerce which seems to be necessary if we are to enjoy success in it.
I beg leave to ask, on behalf of the merchants at Shanghai, that their representation be laid before Congress, and with it this letter, if it shall seem to you worthy to be so dealt with.
I am, &c.,