SUCCESSFULLY WITH FOREIGN SHIPS? 193 



How heavy was that handicap can be demonstrated by a comparison of the capital 

 charges of a British-built ship produced at a price of $500,000 and an American-built ship 

 produced at a price greater by 40 per cent, or of $700,000: 



British shtf American shif 



$500,000 $700,000 



Interest, 5 per cent $25,000 $35,000 



Insurance, 4 per cent 20,000 28,000 



Depreciation, 5 per cent 25,000 35,000 



$70,000 $98,000 



Here, without any allowance whatever for the higher American wage costs of opera- 

 tion, is a difference in the main capital or carrying charges of $28,000 a year, or in itself 

 a fair rate of dividend upon the total cost of the British-built vessel. This fact alone would 

 sufifiice to bar the American ship from competition. 



Moreover, the wages and maintenance of the officers and men of the American steamer 

 were at least 50 per cent greater than the wages and maintenance of the officers and men of 

 the British steamer — a factor important of itself though of far less consequence than the han- 

 dicap due to the higher cost of building as outlined above. It is not at all strange that from 

 the building of the Ohio and her sisters for the Philadelphia American Line in 1873 the Stars 

 and Stripes flew above no new American-built steamers exclusively employed in transatlantic 

 trade until the keels of the St. Louis and St. Paul were laid by the power of a special mail 

 subsidy in 1894 and 1895. Between far higher costs of original construction and higher 

 costs of crew wages and maintenance, rivalry with European ships, often state-aided as they 

 were, was accepted by American shipowners as impossible. 



When the shrewd diplomacy of Europe from 1815 onward had succeeded in enmeshing 

 our government in treaties that gradually prevented us from encouraging our ships through 

 the historic policy of discriminating customs duties and tonnage dues, our competitors over- 

 seas lost no time in launching out on a new and effective expedient of their own — mail and 

 admiralty subsidies and subventions. The first sustained British transatlantic steam service 

 was created in 1839 by the grant of a mail subsidy of $425,000 a year to what is now world 

 famous as the Cunard Company of England. Other subsidies, even larger in amounts, called 

 into being the Peninsular & Oriental Line to India, the Royal Mail Line to the West Indies 

 and South America and other British concerns, until finally thirty national steamship serv- 

 ices reached all quarters of the world. France quickly followed suit. Germany put the powers 

 of state aid, though in other forms than subsidy, behind the North German Lloyd and the 

 Hamburg American. Our own Congress, in a fitful way, beginning with 1847, granted lib- 

 eral mail pay to especial new American ocean steam lines, the best remembered of which are 

 the Collins Line to Europe and the Pacific Mail to the Isthmus of Panama and on the Pacific 

 Ocean. But while other nations were united in loyal zeal for the national interests, it hap- 

 pened, unforttmately for us, that this new and crucial steamship competition fell in a period 

 that saw America rent by the sectional quarrels immediately preceding the Civil War. South- 

 em statesmen, who at first had borne a full share in urging encouragement to our own 

 national mail lines, turned against them when they saw how swiftly these new lines were 

 upbuilding the sea power of the North. In the very crisis of the struggle between our Amer- 



