Wealth against commonwealth

by Henry Demarest Lloyd

It was the old spirit of rebate which sought and gave the preference. Nothing could make such legislation respectable but the extension of its benefits to all Americans owning such ships. But no such extension was contemplated. The law gave a privilege not to the American flag, but to the owners of the American flags of these two steamers. "There is little probability," Senator Frye was reported as saying, December 22, 1892, in the New York Tribune, friendly to him and to the policy of subsidy, "of the passage of any more laws giving the privilege of an American registry to vessels upon the building of which no American labor has been expended. The twin steamers City of New York and City of Paris have set a fashion of which they will be the only exponents."

There is a pool of the steamers between America and Europe called the North Atlantic Steamship Association. At its meeting in December, 1892, this association discussed plans for reducing the number of trips, increasing passenger rates, withdrawing excursion rates to the World's Fair, and discontinuing the steerage traffic. This was duly followed by the announcement in March, 1893, for which it was presumably a preparation, that steerage traffic was renewed, but at an increase of rates. Passenger rates of the higher class have also been raised. Agreements to restrict the number of ships; pools to put up rates; steamship wars to destroy competitors; the use of "pull" to procure from the admiralty, sanitary, naval, immigration, and other governmental bureaus, here and abroad, regulations ostensibly for public convenience, really to make business, as nearly as can be, impossible for others; lobbies to buy legislation for private interests—all these may be expected to replace the magnificent and manly rivalries of the days when the unbribed flag floated on its own breath in every sea.

Under the policy of subsidy—the policy of aristocracy, exclusion, scarcity, corruption, war, and loss of liberty—the contest for maritime and commercial supremacy becomes a contest between the subsidy lobbies in Washington and at Westminster, Paris, and Berlin. If the duke who is at the head of one of the great English steamship lines obtains an increase of subsidy, the maritime dukes in America will call on Congress not to shame itself by doing less for Americans than Parliament has done for Englishmen. If all the English and American lines pass under one ducal yoke—following the internationalization of other syndicated businesses of Great Britain and America—one hidden hand will manage for one purse the make-believe duel between Parliament and Congress, while the uninitiated people glare across the ocean at each other, and each inspired press calls on its government not to allow its commercial supremacy to be destroyed by vulgar and unpatriotic economy. In advocacy of subsidy—breeder of sea-dogs, naval contractors, of war, and of treasury-suckled syndicates to fan its flames—the Secretary of the Navy wrote to the Chairman of the Senate Committee on Commerce in this case, "A fleet of such cruisers would sweep an enemy's commerce from the ocean." All through the press, from New York to Texas and the Pacific coast, every possible change of phrase is rung to fire the American heart with "jingo" exhortations to subsidize private steamers so as to increase our fighting kennel.

The "American idea" is that individuals as well as corporations, poor men as well as rich ones, small towns as well as large ones, one maritime State as well as another, should be encouraged to follow the sea. The old woman who thanked God, upon her first sight of the sea, that at last she had seen something there was enough of, lived before subsidies were invented and the sea shrank to be too small for all the people.

The contracts made with the International Company bind the government to pay it $4.00 a mile for fifty-two trips a year (3162 miles each) between New York and Southampton for the ten years (1895-1905)—$657,696 a year, and $6,576,960 for the ten years; and the same rate a mile for the same number of trips a year (of 3350 miles each) between New York and Antwerp for ten years—$696,800 a year, and $6,968,000 for the ten years. This makes an income from the mails alone of $1,354,496 a year on the not-to-exceed $10,000,000 which the company will have invested. At the end of the ten years it will have received from these government contracts alone its whole investment, and more than one-third in addition. The American taxpayer will receive for his share the profit and pleasure of being forbidden to send his letters to Europe by faster and cheaper boats, when these appear, as they have already begun to do. The trial trips of new steamers of other lines show them to be faster than the vessels we have bound ourselves to. "The American principle" used to be to send all mails by the fastest ships. Now, to develop the "American merchant marine," we relieve it from all necessity of competing in speed, or anything else, with the foreign marine.

With such legislation and contracts in hand, any syndicate could go to the banks and borrow at the lowest rates every cent of the millions it needed to carry out its plans. It need not invest a dollar of its own. Good enough "collateral" for borrowing would be this privilege—practically a capital of millions got from the government for nothing. Done for favored citizens, this is "the development of our national resources"; done for the whole people, it would be "socialism" or something more dreadful. Thus guaranteed dividends by the forced contributions of the American people, this company, if threatened with competition by other lines, old or new, can lower freights and fares to rates at which others cannot live. The subsidies are a reserve fund on which it can subsist while doing other business below cost. The vision of this will deter other capitalists from building vessels, as they have been frightened out of building tank-cars. The company can, by a war of rates, force the sale to it of such vessels as it wants out of the present Atlantic fleet. The scheme, which has progressed so smoothly through the various stages of the Postal Subsidy law—the exemption by special legislation of the two steamers from their foreign disabilities, the negotiation of the contracts for subsidies until A.D. 1905 for steamers yet unborn—is an entering wedge, the broad end of which may easily grow to be a monopoly of the transatlantic—and why not transpacific?—traffic and travel.

And in future legislation, tariffs, and contracts, what bulwark of the people would avail against the Washington lobby of these combined syndicates of oil, natural gas, illuminating gas, coal, lead, linseed-oil, railroads, street-railroads, banks, ocean and lake steamships and whalebacks, iron and copper mines, steel mills, etc.? These beggars on horseback—the poor we will always have with us as long as we give such alms—are forever at the elbows of the secretaries, representatives, senators. The people who pay are at work in their fields, out of sight, scattered over thousands of miles.

Having evaded, by the complaisance of Congress, the requirements of the subsidy law in the case of its two non-American steamers, the company sought to be relieved by the Secretary of the Treasury from the necessity of manning its boats with Americans, as stipulated by the law. It was unwilling to sacrifice the foreign captains in its employ, as the despatches said, "for the untried men of American citizenship," regardless that one of the strongest promises of the subsidy givers and takers was to recall to the sea the American citizenship banished thence. The company had already driven its foreign-built boats through the law, why not its foreign captains? It applied to the Treasury Department for permission to retain them. To furnish a ground for such a ruling, the foreign captains had given notice of their "intention" to become citizens. They could not become citizens for five years, and the courts hold that such a declaration does not meet the requirements of the law that the officers of United States vessels shall be citizens of the United States. The ruling asked for was refused by Assistant Secretary of the Treasury Nettleton. The question was not dropped. Some months later (December 2, 1892) the Washington despatches of the Philadelphia Ledger and the New York Herald reported that "Secretary Foster of the Treasury is disposed to accede to the wishes of the company, if it can possibly be done within the law," and in the New York Tribune we read that "he is inclined to the view that an exception might safely be made in this case."

The raising of the American flag on these steamers—one at New York and the other at Southampton—in the spring of 1893, was made a state ceremony in both countries. The President of the United States came on specially from the capital to honor the occasion, though this had never been done before when the American flag was raised on vessels admitted to foreign registry. The American minister left the embassy at London to officiate at Southampton. The vessels were announced to be under American captains transferred from other ships owned by the same men. But the Society of American Marine Engineers and the Brotherhood of Steamboat Pilots discovered that other officers—the foreign engineers of the vessels—had been retained, though they were foreigners. The former began an agitation for the protection of their legal rights. Remonstrances from every important branch of the two societies from San Francisco to New York were forwarded to the President of the United States and the Secretary of the Treasury of the new administration which had just gone into office. Counsel were employed to present their case. It was found that one of the last official acts of the out-going Secretary of the Treasury had been the order authorizing the issue of licenses to foreign engineers. Attempts to procure a copy of this order from the department have failed. Engineers have always been considered to be officers. If they are such, this exemption was a violation of the statutes of the United States which require that officers shall be American. It reversed all the decisions which hold that declaration of an intention to become a citizen does not make one legally a citizen, for that would give foreigners, as in this case, the advantages of citizenship without its duties; and indefinitely, for the intention might never be executed. The order of the Secretary makes a precedent upon which foreign captains may be employed—the objection being the same in either case—and their reappearance may therefore be confidently looked for. The appropriation once got, "Old Glory" is hauled down.

An "American Seaman" wrote the New York World that when he offered himself for employment on the boat which had just replaced with so much pomp the British flag with the American he was almost laughed at, and was told there had been ninety men on board that morning on the same errand. All got the same answer, "We don't want you. We employ all our hands on the other side." The articles circulated throughout the country to create public opinion in favor of these subsidies dwell much on the "glory" and advantage of having Americans in command of these vessels with a full American force under them. But the subsidy secured, we see these American vessels, which may be called upon to take part in a war with Great Britain, are manned by British engineers and British seamen. The lower compensation they are accustomed to will help keep down the cost of manning the other vessels to be built for the line.