Wealth against commonwealth

by Henry Demarest Lloyd

In May of the next year, 1892, a bill was whizzed through Congress almost without debate, in which the forms of the principal beneficiaries-to-be of the law of 1891 loomed into view. The subsidy law gave its bonus only to vessels that could fly the American flag because American built and manned. This new act exempted from these conditions the two principal steamers of the Inman, now the International, line—the City of New York and the City of Paris—provided the company built two other steamers that fulfilled the requirements of the subsidy law. The sequel disclosed that their owners had a well-laid plan to build more than two other steamers to get the rich rewards of the subsidy law. The steamers and the company were not named. That was not needed. The bill was drawn with such limitations as to size, speed, ownership, etc., that these were the only two vessels which could come under its provisions. The bill was introduced in the House by a prominent Democrat, and in the Senate by a prominent Republican. It was passed by both Houses regardless of party distinctions. The Secretary of the Navy urged the bill upon the naval committees of Congress. He had begun to do so in his first report to Congress and subsequent communications, in which he referred by name to the vessels which were masked in this legislation. The head of the line and other owners were members of the oil combination. The president of the steamship company has been the president of the pipe-line branch of the oil trust—its largest single interest—from the time of its organization in 1881.[575] This exemption from the law was engineered through the Senate by one who had hitherto always been conspicuously strenuous in refusing to abate his opposition to admitting to American registry any ship not built in America, of American materials, by American labor, but who now had suffered some sea change.

Ordinary citizens who want to get the profits of carrying the American mails must build their boats in American ship-yards; but the syndicate got members of Congress to grant them by law that which all others must earn.

The enactment of the Postal Subsidy law and the exemption of these steamers by special law were the first two parts of a progressive programme. The third step was the negotiation of contracts with the Postmaster-General for the prizes of subsidy. Immediately upon the passage of this special legislation the Postmaster-General went through the necessary but empty parade of advertising for bids for a service for which there could be only one possible bidder. The awarding of contracts to the steamship company so "fortunate in competing" was announced in the press in October, 1892.

The Postmaster-General dated the contracts 1895—three years ahead. They run for ten years from that time. An iron-clad, or, better than iron-clad, law-clad contract was thus secured, giving a complete monopoly of the mail business between America and Europe until A.D. 1905, five years into the twentieth century. The legislation of May contemplated the construction of two new boats. The contracts secured from the Postmaster-General showed that the line intended to build five, and obligated the government to pay subsidies to all of them, as well as to the two foreign-built steamers given by special legislation the right to fly the American flag. By these contracts the company, after the completion of its new steamers in about three years, will exclusively carry every bag of mail that leaves America for Europe. Meanwhile the mails are to be given to its two steamers now running, the Paris and the New York, whenever they are in port. This has been frequently done in the past on account of their speed, but the compensation for this, under the law and the new contracts, has been made much greater than the price hitherto paid. With but one or two exceptions the mails on all the routes where subsidy is given—to South America, Havana, China, Europe—were carried before the subsidy law on the same ships as now. Except a very trifling saving in time, the only change the law has made here is that the gains of the carriers have been swelled at the cost of the taxpayers. The American shippers carrying the mails at the regular weight rates were making a profit. The Post-office, under the new deal, gets only what it has been getting—the carriage of the mails; but the steamship company gets a great deal more. This is the "pleasure of making it cheap" applied to the postal service.

By this procession of moves the company secured profitable contracts ten years ahead on present ships, the Paris and the New York—although these had not yet done as much as fly the American flag in compliance with the special legislation in their behalf—and on future ships that were not yet built or contracted for. All was in the future—the American registry for the Paris and the New York, the building of the new steamers required by the special legislation. But one thing was got in hand, and was not in the future tense—the contract with the American Post-office, binding it to pay millions a year. The privileges conferred by this legislation were so valuable that, as Senator Frye stated in debate, its recipients to gain them were to forfeit $105,000 due them from the British Government.

The American registry would be a capital advertisement to catch the American tourist. Travelling, says Emerson, is a fool's paradise, and the shifting population of that paradise would never stop to think out the fraud in the appeal to their patriotism. Much was made in the sentimental Senate of the privilege the law would give Americans of going abroad in their own ships under their own flag. The press was used shrewdly and widely to gain the favor of the public for these incursions into their Treasury. Pages of advertising, in the dress of news-matter, were put into prominent journals, telling in glowing phrases what a great thing Congress, the Postmaster-General, and the steamship company were doing for the people. The same editorial on the promised restoration of American maritime supremacy would appear as original in journals thousands of miles apart. As the panorama of journalism moved along with its daily shift any observer could see the methodical and business-like way in which the syndicate "inspired" the press. Articles about the "great steamship line" appeared on the same date in the papers of different cities, giving the same facts in the same order, and nearly the same words, following "copy" evidently supplied from a common source. One day these chimes all sing the immeasurable superiority of Southampton over Liverpool as a port for Americans; another day the unspeakable sagacity of the Postmaster-General in giving this company the mails is the tune; and again the ding-dong tells how, but for the syndicate and its subsidy, the American flag—"Old Glory"—would be seen no more on the seas. The average citizen who reads "his" paper is no doubt duly impressed.

"Old Glory on the seas!" cried the excitable metropolitan editors. "The dear old flag!" "America again Queen of the seas!" "A new era is about to dawn on our long-neglected commerce!" Our long-absent flag is about to reappear, but not, as in the old days, as the symbol of a people's commerce. It signalizes the commerce of syndicates. The democratic idea of a chance for all has been abandoned for the aristocratic idea of the favored few. "Poor indeed in spirit must be the American," said the New York Tribune, "who will not hail with satisfaction and pride the early prospect of the reappearance of the flag in English, French, and Belgian ports." Poor, fortunately, it was replied, are many Americans in the spirit which taxes all the people out of an industry in which they once led the world, and then taxes them to give that same industry as an exclusive privilege to a syndicate—and such a syndicate!

There was a rapturous chorus from the press because American materials and American labor are to be employed in the construction and use of the new vessels to be built for subsidies. When American labor was free to employ itself and American materials with no subsidies, American boats did absolutely the whole packet business between England and America.[576]

Now American seamanship must remain content to be employed to such an extent and on such terms as may suit the interests of a few men, under whose captainship the once glorious expansion of our commerce on the seas is replaced by a system limited on every side. Limited by the expensiveness of entering the occupation: a special bill has to be passed through Congress in each case to confer the right to fly the American flag on ships bought abroad, and for this the merely legitimate expenses are heavy—trips to Washington, appearances before committees and departments, with expert representatives. Limited by their small number: instead of thousands building and running new ships, a score. Limited by their capital: great, it is still much less than the aggregate, if all had a chance. Limited by the narrowness of view and enterprise inevitable with a few, however capable: everybody knows more than anybody. Limited by the lack of diversity in opinion and interests: with many men of many minds, of varying forecasts and moods and gaits, the currents of industry are kept fuller and steadier than is possible under a clique rule. Limited by selfishness: the few will inevitably come to regard the ocean-carrying business as "belonging to us," like oil, and with their crushing wealth will treat as "black-mailers" intruders with new ships and new methods. Limited by the impossibility the subsidy system imposes upon the average citizen of competing against the government—against himself multiplied by all his fellow-citizens. Limited by corruption: when this subsidy bill was under discussion, Representative Blount, of Georgia,[577] called attention to the methods by which previous legislation of the same sort, "to build up the American merchant marine and increase the commerce of the country," had been sought from Congress. Quoting from the report made to Congress in 1874-75 by Representative Kasson, of Iowa, he showed that the Pacific Mail Company, to get a subsidy, had disbursed $703,000 among the members and officers of Congress and other persons influential in legislation. "Yankee maritime enterprise," this is called. The great captains, Bursley, Anthony, Delano, Dumaresq, Comstock, Eldridge, Nye, Marshall, Holdredge, Morgan, and other sturdy Americans who led the nautical world wherever speed, safety, and courage were called for, outsailing competition even from the land where "Blake and mighty Nelson fell"[578]—they had a manlier idea of enterprise than being supported at the public expense in floating poor-houses miscalled floating hotels.

The few men who are the beneficiaries of taxes paid by the many will be powerful and shrewd enough to get other dispensations or benefits, post-office contracts, naval contracts, or modifications of the strict terms of their agreement, and with this help from the taxpayer they can do business at a figure which, though very remunerative to themselves, will drive the unaided citizen competitor out of the business. Honest citizens cannot ask for such favors. Poor men could not get them.