y giving special differential rates of carriage over her railroads for
merchandise shipped by those lines. Spain, Norway, Austria-Hungary,
Canada, all subsidize their own lines. It is estimated that about
$28,000,000 a year are paid by our commercial competitors to their
steamship lines.

Against these advantages of his competitor the American shipowner has to
contend; and it is manifest that the subsidized ship can afford to carry
freight at cost for a period long enough to drive him out of business.

We are living in a world not of natural competition, but of subsidized
competition. State aid to steamship lines is as much a part of the
commercial system of our day as state employment of consuls to promote
business.

It will be observed that both of these disadvantages under which the
American shipowner labors are artificial; they are created by
governmental action--one by our own Government in raising the standard
of wages and living, by the protective tariff; the other by foreign
governments in paying subsidies to their ships for the promotion of
their own trade. For the American shipowner it is not a contest of
intelligence, skill, industry, and thrift against similar qualities in
his competitor; it is a contest against his competitors and his
competitors' governments and his own government also.

Plainly, these disadvantages created by governmental action can be
neutralized only by governmental action, and should be neutralized by
such action.

What action ought our Government to take for the accomplishment of this
just purpose? Three kinds of action have been advocated.

1. A law providing for free ships--that is, permitting Americans to buy
ships in other countries and bring them under the American flag.
Plainly, this would not at all meet the difficulties which I have
described. The only thing it would accomplish would be to overcome the
excess in cost of building a ship in an American shipyard over the cost
of building it in a foreign shipyard; but since all the materials which
enter into an American ship are entirely relieved of duty, the
difference in cost of construction is so slight as to be practically a
negligible quantity, and to afford no substantial obstacle to the
revival of American shipping. The expedient of free ships, therefore,
would be merely to sacrifice our American shipbuilding industry, which
ought to be revived and enlarged with American shipping, and to
sacrifice it without receivin