INTRODUCTORY PROCEEDINGS. xxxvii 



ican flag will naturally depend largely on the laws which will be in force "when this cruel 

 war is over." 



The prominent propositions which have yet to be acted upon are the purchase of foreign 

 vessels, some of which are now interned in our own seaports ; and the formation of a steam- 

 ship corporation to operate so-called American ships in the trade of the world, either scheme 

 to be supported entirely or in a great measure by the United States Government. 



The President of the United States in his message to Congress just convened says that 

 to "correct the many mistakes by which we have discouraged and all but destroyed the mer- 

 chant marine of the country, to retrace the steps by which we have, it seems almost delib- 

 erately, withdrawn our flag from the seas, would take a long time and involve many detailed 

 items of legislation." Also in reference to the pending Shipping Bill he says: — "In my judg- 

 ment such legislation is imperatively needed and cannot wisely be postponed. The Govern- 

 ment must open these gates of trade and open them wide ; open them before it is altogether 

 profitable to open them or altogether reasonable to ask private capital to open them at a 

 venture." 



These words would be very encouraging if they did not indicate government ownership 

 and operation, our experience in which does not make us enthusiastic. Government ownership 

 has not proven better than private enterprise by any means. Those who have used govern- 

 ment owned and controlled telephone and railroad systems abroad know how they compare 

 with these systems in the United States. 



In this we have the corroborative opinion of M. Yves Guyot, President of Societe d'Eco- 

 nomique Politique and former Minister of Public Works in Paris, who has recently published 

 his views on this subject in "When and Why Public Ownership Has Failed." 



I quote a sentence or two : — "Individuals are industrious, productive and economical ; but 

 administrative and political groups, both national and municipal, are wasteful and run the tax- 

 payers into debt." Again, "Men in office do this or that as the first consideration according to 

 what will make the broadest appeal to present popular prejudices and sympathies and further 

 expenditures with a certain audacity which please better than those which do not appeal to 

 public imagination." 



Like American travelers, M. Guyot criticizes such of the railroads in France, Germany, 

 Belgium and Austria as are owned by the governments and shows an advantage to the public 

 in the railroads of these same countries that are operated by private corporations. 



Now government operation of ships can only be performed with a disregard of original 

 cost and the regular overhead charges which must in any event be met. 



The actual cost of building and operating steamers under the United States laws accord- 

 ing to published figures is at least 40 per cent higher than under the English or German flag, 

 and even more under the flags of some other nations; and if the United States Government 

 builds the vessels for our merchant marine, it is certain that the specifications and inspection 

 will make the cost much higher. This great difference cannot be met by earnings, and of 

 course there will be no profit. The taxpayers will pay the bill, making such expenditures 

 practically a subsidy in disguise. 



There are difficulties in bringing about the re-establishment of a merchant marine so long 

 neglected. The Civil War practically destroyed what was then left of American lines to 

 foreign countries, as the capacity of our shipyards was required for naval purposes. At 

 the same time advantage of the change from wood to iron for hulls was taken by those 

 abroad, particularly by English shipbuilders, w lo made great strides forward. Our own coun- 



