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July, 1916 only to the unthinkable possibility of a single railroad in the United States being given the power to regulate the rates and practices of all its com- petitors. Since export freight rates are, as a rule, paid by the purchaser and do not affect the seller unless they are higher than those enjoyed by an oversea com- petitor, a government rate-regulating policy would seem to thwart the ad- vantage which the American exporter sometimes can obtain by a special rate sufficiently low to enable him to place his product in a foreign market at a lower price than his oversea competitor. While the bill provides that prefer- ential rates may be ordered by the ship- ping board, it is doubtful if this pro- cess would be sufficiently expeditious to THE MARINE REVIEW American given export competition in a neutral market would be deemed, by the competing countries, to be a discriminating policy, is a consideration not to be ignored. The possibility of reprisals should not be overlooked. This bill proposes on be- half of the United States. an innova- tion in the “free ocean” conditions under which 45,000,000 tons of steam shipping has been established by the nations of the world in foreign trade, a considerable portion of which in time of peace has always been respon- sive to the needs of American ex- ports and imports. The purpose of the proposed legislation is to sup- plement this responsiveness to the law of supply and demand with a certain compulsion, but it is greatly to How Foreign Trade Council Would Build Up American Marine 247 15,455.) now pending, which denies clearance only to vessels operated by ship owners or charterers guilty of oppressive practices, rebating, etc., and which provides for filing of con- ference agreements, etc., for approval or disapproval by the interstate com- merce commission, and which forbids rebating, undue discrimination between persons and places, and authorizes the prescribing of maximum reasonable rates only when complaint has been made that rates in effect are unreason- ably high or discriminatory. In other words, it provides a method for the elimination of abuses without attempt- ing to cover the oceans of the world with a fabric of artificial rates, a task often considered but never attempted by nations with a far greater depend- 1—That congress establish a permanent shipping board, composed of five members, who shall be men experienced in shipping and foreign trade. This board shall recom- mend to congress such revision and modernization of all United States laws relating to shipping as it deems neces- sary and shall permanently discharge all the functions of the federal government relating thereto. This board shall constitute a permanent advisory body empowered to recommend to congress the measures necessary for the maintenance of United States shipping upon an equitable competitive basis with other nations, always having due regard for the maintenance of American standards of. hving and compensation, and keeping in view the needs of the national defense and the necessities of the foreign trade. To this end the board should be directed to ascertain the cost of construction and operation, rates of interest on shipping mortages, insurance rates, etc., of American shipping as compared with that of other nations, and it should be its duty to determine what line of ocean-carrying trade shall be permanently developed under the American flag for the benefit of the foreign commerce of the United, States, and to recommend methods whereby such lines may be rendered possible, im the event of the cost of their operation preventing effective competition with foreign services in the same cone. 2—That the board bring to the attention of congress the necessity of modifications of the speed requirements of the mail act of 1891 in special cases, so that the estab- lishment of mail communications with South America, South Africa, Australasia and the Far East may be con-' sidered from the several points of view of the cost of operation of such lines and of the speeds at which it is desirable that these lines be maintained. 3—That the board so constituted shall likewise report under the measures. necessary to render investment in American shipping safe and attractive to private capital, and to increase the present resources of our systems of credit, as by the establishment of mortgage banks, to supply funds to the shipping industry for financing the construction of tonnage, and to throw around shipping mortgages such protection as to remove any apprehension on the part of investors regarding the safety of ship- ping propositions. 4—That the President be empowered to suspend the operation of such of the provisions of the seaman’s act (applicable to American vessels, Nov. 4, 1915; foreign vessels, March 4, 1916), as he may consider detrimental to the interest of American shipping, until congress, having before it the advice of the shipping board, has revised and modernized the United States navigation laws; or af this suspension be deemed not expedient by congress, then that section 13 of the seamen’s act be amended so as to eliminate the language test and the minimum per- centages of able seamen among the deck crew, substitut- ing therefor provisions equivalent to the requirements of the British merchant shipping act, and that the re- quirements of section 14 and annexed regulations con- cerning certificated lifeboat men, etc., be modified in conformity with the 1914 amendment to the British mer- chant shipping act. ee meet the needs of competition with the shipping of other countries whose gov- ernments, after careful consideration, have declined to attempt the regulation of ocean freight rates. It is respect- fully submitted that the control of ocean freight rates by exercise of power to deny clearance to foreign vessels, is a hazardous experiment, vastly different from the regulation of railroad rates in interstate commerce, where all carriers are equally subject to federal control. In the increasingly keen competi- tion for foreign trade, American ves- sel owners are at liberty to offer, and shippers to seek, the lowest possible trates for the extension of American trade in neutral markets. Whether an official shipping board’s regulation of rates in such manner as to stimulate be feared that the imposition upon all vessels clearing from American ports of requirements in excess of those prevailing at the ports of competing countries will drive away the carriers whose ample numbers _ normally (though not during the present war) produces a competition assuring reas- onable rates. Attention is called to the’ fact that after exhaustive investigation of ocean freighting conditions, rates and prac- tices, the merchant marine and fisher- ies committee of the house of repre- sentatives deemed it wise to go no further, in regulation of water car- riers in foreign commerce than is pro- vided in the Bill H. R. 450, (The gen- eral provisions of H. R. 450 have been embodied in the substitute bill H. R. ence than the United States upon ma- rine transportation. H. R. 450 pro- vides for no system of licenses. The fact that European maritime nations have, under war necessity, adopted a license system in order to retain the use of their national shipping in an advancing market, affords no basis of comparison for the delineation of an American policy in time of peace. The stipulation that no vessel regis- tered or enrolled under the laws of the United States shall be sold, save to an American citizen, is designed to prevent a principle universally char- acteristic of maritime development, namely, the sale of old ships to make way for new. A well organized mer- chant marine should consist of a large percentage of new vessels, the super-