208 HOW CAN AMERICAN SHIPS COMPETE 



shown; first for a British steamer of 8,800 tons deadweight at $20 per ton deadweight value, 

 and in 1913 the coal rates ran between $3.60 and $4.20; the cost of transportation at that 

 time was $3.19 and the profit was an average of 70 cents. In May, 1921, the coal rates 

 existing between Hampton Roads and Genoa were between $6 and $6.50 — the cost of trans- 

 portation had increased to $5.70, leaving a margin of profit of about 55 cents per ton. In 

 November, 1921, the coal rates had been reduced to $4.25 and the cost of transportation 

 for British steamers $4.55, leaving a loss of 30 cents per ton. For an American steamer, 

 on the same value of vessel and of the same size, as of November, 1921, the coal rates are 

 still $4.25 and the cost of transportation $6.07, showing a loss to the American steamer of 

 $1.82 per ton and completely eliminating the American steamer from this trade. 



We therefore conclude, from the above facts of the actual operation at the present time 

 of American steamers, that it is impossible at the present time and under present conditions 

 for American steamers to compete with foreign steamers. We also find from the above that 

 if a subsidy is adopted it will mean an annual payment by the Government to overcome the 

 extra wages of a sum amounting to $31,680,000 per year. It also shows that, if no finan- 

 cial assistance is given to the American shipowner, it will be necessary to employ foreign labor 

 at the cheapest rate on board American steamers. These figures also indicate that the pres- 

 ent value of tonnage is not more than $20 per deadweight ton as shown from the actual work- 

 ing of the ship and also from the record of the past year from the sale of ships in Europe 

 which bears out this value, and therefore shows a very serious situation for obtaining new 

 contracts for the shipyards, for selling the surplus steamers belonging to the U. S. Shipping 

 Board, and for the possibility of American shipowners owning high-priced tonnage writing 

 down their steamers at the present low freight rates. 



We all should forget our own selfish points of view — the designers of vessels, the ship- 

 builders, the repairers and the suppliers of materials and equipment should all be represented 

 in the same lifeboat, and strive to save ourselves from drowning. By steering the Senate, 

 House of Representatives and the labor unions in the right course we may be able to reduce 

 our costs to such an extent that the shipowner can operate his steamers successfully in com- 

 petition with the foreigner and thus build up a merchant marine worthy of these great 

 United States. 



Mr. Marvin : — I would like to voice my own thanks for the very careful paper which 

 has been prepared by our friend and neighbor. I think it is the most accurate statement of 

 exact conditions which now confront American shipowners. The figures prove absolutely 

 the contention that American vessels cannot live on the high seas today any more than they 

 could before the great war. I think that Mr. Donald has rendered a great service to this 

 Society and the whole American merchant marine by portraying the actual ship competitive 

 conditions more graphically, and I think more fairly, than I have ever yet happened to see 

 them presented anywhere. 



On the matter of the suggestion that we employ foreign labor, Mr. President, I am not 

 sanguine that we could permanently gain very much by that expedient, but I would like to 

 impress upon the members of the Society that that expedient is entirely open to us at the 

 present time, for except on a very few steamers provided for under the Act of 1891, all the 

 crews below the rank of licensed officers can be of any nationality ; they can even be all Chi- 

 nese, but our experience is that, when we have used foreign labor, foreign labor, overnight, 

 so to speak, demands and receives the American wage scale. Before the war, not 10 per 



