THE PROBLEM OF SHIPPING

Wanganui Chronicle, Volume 74, Issue 241, 12 October 1931, Page 5

THE PROBLEM OF SHIPPING

THE AMERICAN PROPOSITION CONSIDERED

THE INTER-PLAY OF TARIFFS AND BOUNTIES.

(By HUGH C. JENKINS. (Article No. 2). In this article the special circumstances of the United States are considered. The cause of bounti es on shipping is explained and the danger of relying on an industry that is “in politics” is pointed out.

The United States is a country which must have a fairly large coastal fleet and since the opening of the Panama Canal and the development of the Hawaiian Isalnds and tho Phillipino Islands it. is but natural that the maritime mindedness of the United States should have been developed. Further, the developments within the United States itself have stimulated this idea of maritime power. Just as the United Kingdom and the Commonwealth of Australia and the Dominion of New Zealand feel that the shipping of their respective countries should not be in alien hands, so, too, is the United States of America motivated by tho same reasoning. It is, obviously, a natural impulse, shared by all maritime countries. American Merchant Tonnage. The trade of the United States, because of its large area, its abundance of resources, and its continually enlarging population, has been predominantly a domestic trade. The ex-port trade for a long time was but a small percentage of the total trade. While this condition existed it was but natural that interest in an American merchant marine should not be much in evidence. Indeed, after tho introduction of iron and steel ships, tho American merchant marine actually declined. The proximity of forests to rivers suitable for shipbuilding gave tho United States the advantage in ship construction prior to 1860, but in the era of the iron and steel ship the position of advantage passed to Great Britain. In the year 1860 the American Mercantile tonnage totalled 5,353,868 tons; by 1880 this total had declined to 4,068,034 tons. By 1900 it was 5,164,839 tons, thus being still short of the total of 1860. In 1914 it had reached 7,928,688 tons. The post-war years, however, saw rapid increases which reached the peak in the year 1922 when a total of 18,462,967 tons was realised. Since then there has been a consistent decline and the 1930 total was 16,067,725 tons. It is to be seen, therefore, that for one reason or another the United States has not been particularly successful up to now in her endeavours to develop its mercantile marine. The Trade of the United States. The development of the United States during the current century has been along the lines of mass production. Mass production demands a mass market and, because of it, the old domestic economy of tho United States has broken down. The export trade is now essential to American industry. The total value of American imports and exports during the century has moved as indicated below:

1929 9,641,388,000 Competition from Foreign Shipping AVhile, therefore, American external trade increased by more than four hundred per cent, in value, the ratio of American vessels to foreign vessels engaged in this trade did not improve in favour of America to the extent w’hich might have been expected. The net tonnage of American and foreign ships and their relative percentages are as follows:

From the year 1920 when American ships carried 51 per cent of the country’s external trade, there has been a

decline to 38.8 per cent of the total im* port and export trade of the country. American shipping has, of course, greatly declined during tho year 1930 and the current year, but the relative figures arc not immediately available. Tariff and Bounty. America’s somewhat unsatisfactory shipping history is to be explained principally by relation to its" tariff policy. With minor exceptions the customs tariff of the United States has been growing higher and higher until it. appears now in danger of toppling. But the mind of the American people i* still predominantly concerned with internal condi Gns. The tariff policy of America i$ to exclude competition from foreign manuracturers by imposing tariff imports. This policy increases in. ternal prices, wmc’i compels wages t® be advanced. This po.icy works satisfy torily for those engaged in the domestic trade, becaun increased cozt of production is passed on to the consumer. Those engaged in the export trade, however, are not so fortunate; the costs of production go up while the selling price of the goods exported has to stand the full blast of world competition. The trade of shipping is tho provision of services which are to be sold outside the borders of the country and in full competition with the sea carriers of th? world. Obviously, then, the high tariff policy of America is detrimental to its own merchant marine service and some means have to be devised of offsetting tho detrimental effects of lhe tariff policy. The bounties accorded to American shipping are the means employed to offset the detrimental effects c«f the tariff, but such a policy of tariff imposition op. imports and bounty feeling on shipping lines does not create a satisfado-y posi.’cn In the first place tho tariff alters and the bounty is nut so easily adjutied upwards. An ioc’ease in the tariff D usually brought about by povr tri J- while bounty increases are only possij 1,. in times of prosperity, becarte the public looks on the shipping bounty as a gift and not as a rebate of tariff importations. The basis of the American mercantile marine, therefore, contains some very unsatisfactory factors and the fact that American merchant shipping is definitely “in politics” makes its position, at base, somewhat precarious. American investors are somewhat used to this precarious condition and, therefore, shipping gains more support in America than would a corresponding proposition in another 1 country of a different political complex. But for another country outside of the American Union to come to depend upon American shipping services would be running grave risks of having those shipping services withdrawn just at tho time when those services were most needed. Merchant Marine and War. In war-time no country can be selfcontained. Each country must needs draw supplies from all the ends of the earth and the United States is no exception to this general circumstance. This is, doubtless, the reason for the bounties on shipping being larger on steamships of high speed. The United States is anxious to become less dependent upon foreign shipping than it is now-, because that foreign shipping may not be available when it is most needed. America, therefore, seeks to build up a shipping service which it can withdraw from world trade in the time of crisis to secure her own immunity from being cut off from supplies of materials which she must draw, from overseas. The American policy in regard to its shipping is quite reasonable from America’s viewpoint. The question which has to be asked is: In how far does America’s maritime policy coincide the interests of Australia and New Zealand. (Third article will appear Wednesday’s edition.)

Y car. Total exports and imports. Dollars. 1900 .. .. .. .. 2,307.096,000 1905 2,806.136,000 19.10 3,429,163,000 1915 5,333.208,000 1920 .... 13,506,497,000 1925 9,136,437,000

Year. American net Per. Foreign net Per tonnage, rent. tonnage, cent. 1900 .. . 12.344,670 22 44,099.676 78 1910 .. . 17.697.062 22 62,244.602 78 1913 .. . 26,693.736 29 66.901,81S 71 1913 . .. 26.693.736 29 66.901.818 71 19’0 .. . 55,239,879 51 53,253,160 49 1925 . .. 67.733.259 41 81,114.736 59 1929 .. . 64,168,406 38.8 100,776,566 61.2