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National Foreign Trade Council in Vigorous Report Tells What is Needed to Vitalize American Shipping—Practical Suggestions Made Foreign Trade Council a truly. national shipping policy should per- mit and encourage the development of a merchant fleet discharging the follow- ing functions: First—To increase the national income and domestic prosperity through greater facilities for the sale abroad of products of the soil and industry of the United States, the importation of materials indis- :pensable to life and industry, and through the freights collected from world commerce; Second—To maintain, under the flag, communication with distant possessions; Third—To aid the national defense and maintain commerce during war, whether the United States be belligerent or neutral. The amount and character of addi- tional tonnage necessary thus to serve American foreign commerce, under our own flag, can best. be determined by analysis of that trade and its transporta- tion, under normal conditions, before ‘the European war. In the fiscal year ended June 30, 1914, a month before hostilities began, foreign vessels carried 80.3 per cent of the total value of our exports and imports; American vessels, 8.3 per cent; cars and other land vehicles, 11.1 per cent. [ THE opinion of the National Non-Competitive and Competitive Exports American exports can be divided broadly into two classes. The first consists of agricultural and forest products vitally necessary to the life and industry of other people upon the free movement of which the existence of a large part of the world’s population depends. These commodities are normally sold for cash, passing to the ownership of foreign buyers, their agents or to middlemen, before leaving our shores. The mari- time nations urgently requiring them, provide the transportation for these commodities which are bulky and cheap, and constitute the greater part of the total value of the export trade. The second and smaller class of American exports consists of partly finished and fully manufactured goods which are not vital to the buyers and which, therefore, enter into competition with similar manufacturers elsewhere produced. To insure a market for this grade of exports it is necessary that transportation cost shall not exceed that of similar products reaching centers of consumption from competing seats of production. This desirable parity of rates in competition with the rest of the world did generally obtain before the war, but in many cases, exporters selling c. i. f. (including cost, insurance and freight in the selling price) and seeking further to extend and diversify American trade, were obliged to estab- lish warehouses throughout the world in order to obtain the advantage of more direct, frequent, and often cheaper, transportation to desirable markets. Under normal conditions superior trans- portation is obtainable at certain Euro- pean ports because the tonnage of im- ports into Europe exceeds that of ex- ports, making more cargo space avail- Submitted to Congress The accompanying -report was submitted by the National Foreign Trade Council to. the merchant marine committee of the house of representatives. The merchant marine committee of the Trade Council formulated the report after a careful inqury, and it was ap- proved by the main body -before submission to congress. The re- port was prepared on the origina! administration shipping bill, which was later considerably modified, as indicated by notations in the pub- lished report. : This report is designed more as an exposition of the fundamental principles which must animate any effective shipping policy than as an onslaught on the administration’s bill. Representing as it does the combined judgment of many of America’s leaders in the marine field, it merits the closest attention. able for shipments to neutral markets capable of consuming American manu- factures. The more numerous. and faster lines from Europe to neutral markets are due to: (a) Greater diversification of Euro- pean export trade; (b) Larger number of traffic-produc- ing ports at which vessels may call in early stages of outbound and last stages of homeward voyages; (c) Profitable passenger traffic cluding emigration) ; (d) Financial support by governments to insure communication with colonies or distant strategic points. (in- Such lines give to European trade a great advantage not only in transporta- tion of high-grade freight, usually classi- fied as express traffic, but also in faster and more frequent mails. Low-grade freight is sometimes carried on liners, but the bulk of it the world over is borne in slow cargo carriers, usually 243 tramp steamships, which do not operate continuously on fixed lines. Imports into the United States like- wise fall into two: classes: highly fin- ished manufactures of small bulk but great value, and raw materials and food stuffs of large bulk. The total tonnage of imports is about half that of ex- ports. Competition for cargoes to the United States, therefore, is nearly always brisk and normally keeps freights on imports (which are ulti- mately borne by the consumer) below those on exports. Tramp Steamships Indispensable The disparity between import and ex- port tonnage vitally affects the character and cost of the transportation afforded the foreign trade of the United States, for it means that not all vessels used in export trade can obtain direct return cargoes, and many therefore must load at foreign ports for destinations other than the United States. For instance, a steamer starting from Savannah across the Atlantic with cotton for Liverpool is likely to be chartered to carry coal from Wales to Argentina to avoid being compelled to return to the United States empty (in ballast). If no cargo offers at Argentine ports she may proceed in ballast to Chile to take nitrate for Europe and thus remain away from the United - States indefinitely or until, at some port, a profitable cargo or charter to the United States is offered. To lay down Pittsburgh steel at Vancouver in competition with British steel shipped from England via Magellan, steamers from New York [owned or chartered by the exporters] in addition to taking steel for Vancouver had to, take cargo for delivery at intermediate points along the west coast of South America and Mexico. After discharging steel at Vancouver, where no cargo direct for the east coast of the United States is regularly available, these vessels ship lumber or coal for the Gulf of Cali- fornia. They are reloaded with copper matte for Dunkirk, France, and in France take chalk for New York, the whole trip consuming from six to eight months. It was the only process whereby the cheap water rate from Liverpool to Vancouver, made possible by the existence of a large export traffic out of British Columbia to Europe and the Far East, could be overcome. In these voyages the export trade of other countries was served three times, while that of the United States was served