3. There remains the third and obvious method: to neutralize the artificial disadvantages imposed upon American shipping through the action of our own government and foreign governments by an equivalent advantage in the form of a subsidy or subvention. In my opinion this is what should be done; it is the sensible and fair thing to do. It is what must be done if we would have a revival of our shipping and the desired development of our foreign trade. We cannot repeal the protective tariff; no political party dreams of repealing it; we do not wish to lower the standard of American living or American wages. We should give back to the shipowner what we take away from him for the purpose of maintaining that standard; and unless we do give it back we shall continue to go without ships. How can the expenditure of public money for the improvement of rivers and harbors to promote trade be justified upon any grounds which do not also sustain this proposal? Would any one reverse the policy that granted aid to the Pacific railroads, the pioneers of our enormous internal commerce, the agencies that built up the great traffic which has enabled half a dozen other roads to be built in later years without a.s.sistance? Such subventions would not be gifts.

They would be at once compensation for injuries inflicted upon American shipping by American laws and the consideration for benefits received by the whole American people--not the shippers or the shipbuilders or the sailors alone, but by every manufacturer, every miner, every farmer, every merchant whose prosperity depends upon a market for his products.

The provision for such just compensation should be carefully shaped and directed so that it will go to individual advantage only so far as the individual is enabled by it to earn a reasonable profit by building up the business of the country.

A bill is now pending in Congress which contains such provisions; it has pa.s.sed the Senate and is now before the House Committee on Merchant Marine and Fisheries; it is known as Senate bill No. 529, Fifty-ninth Congress, First Session. It provides specifically that the Postmaster-General may pay to American steamships, of specified rates of speed, carrying mails upon a regular service, compensation not to exceed the following amounts: For a line from an Atlantic port to Brazil, monthly, $150,000 a year; for a line from an Atlantic port to Uruguay and Argentina, monthly, $187,500 a year; for a line from a Gulf port to Brazil, monthly, $137,500 a year; for a line from each of two Gulf ports and from New Orleans to Central America and the Isthmus of Panama, weekly, $75,000 a year; for a line from a Gulf port to Mexico, weekly, $50,000 a year; for a line from a Pacific coast port to Mexico, Central America, and the Isthmus of Panama, fortnightly, $120,000 a year. For these six regular lines a total of $720,000. The payments provided are no more than enough to give the American ships a fair living chance in the compet.i.tion.

There are other wise and reasonable provisions in the bill relating to trade with the Orient, to tramp steamers, and to a naval reserve, but I am now concerned with the provisions for trade to the south. The hope of such a trade lies chiefly in the pa.s.sage of that bill.

Postmaster-General Cortelyou, in his report for 1905, said:

Congress has authorized the Postmaster-General, by the act of 1891, to contract with the owners of American steamships for ocean mail service and has realized the impracticability of commanding suitable steamships in the interest of the postal service alone by requiring that such steamers shall be of a size, cla.s.s, and equipment which will promote commerce and become available as auxiliary cruisers of the navy in case of need. The compensation allowed to such steamers is found to be wholly inadequate to secure the proposals contemplated; hence, advertis.e.m.e.nts from time to time have failed to develop any bids for much-needed service. This is especially true in regard to several of the countries of South America, with which we have cordial relations and which, for manifest reasons, should have direct mail connections with us. I refer to Brazil and countries south of it. Complaints of serious delay to mails for these countries have become frequent and emphatic, leading to the suggestion on the part of certain officials of the government that for the present and until more satisfactory direct communication can be established, important mails should be dispatched to South America by way of European ports and on European steamers, which would not only involve the United States in the payment of double transit rates to a foreign country for the dispatch of its mails to countries of our own hemisphere, but might seriously embarra.s.s the government in the exchange of important official and diplomatic correspondence.

The fact that the government claims exclusive control of the transmission of letter mail throughout its own territory would seem to imply that it should secure and maintain the exclusive jurisdiction when necessary, of its mails on the high seas. The unprecedented expansion of trade and foreign commerce justifies prompt consideration of an adequate foreign mail service.

It is difficult to believe, but it is true, that out of this faulty ocean mail service the government of the United States is making a large profit. The actual cost to the government last year of the ocean mail service to foreign countries other than Canada and Mexico was $2,965,624.21, while the proceeds realized by the government from postage between the United States and foreign countries other than Canada and Mexico was $6,008,807.53, leaving the profit to the United States of $3,043,183.32; that is to say, under existing law the government of the United States, having a.s.sumed the monopoly of carrying the mails for the people of the country, is making a profit of $3,000,000 per annum by rendering cheap and inefficient service. Every dollar of that three millions is made at the expense of the commerce of the United States. What can be plainer than that the government ought to expend at least the profits that it gets from the ocean mail service in making the ocean mail service efficient. One quarter of those profits would establish all these lines which I have described between the United States and South and Central America, and give us, besides a good mail service, enlarged markets for the producers and merchants of the United States who pay the postage from which the profits come.[12]

In his last message to Congress, President Roosevelt said:

To the spread of our trade in peace and the defense of our flag in war a great and prosperous merchant marine is indispensable. We should have ships of our own and seamen of our own to convey our goods to neutral markets, and in case of need to reenforce our battle line. It cannot but be a source of regret and uneasiness to us that the lines of communication with our sister republics of South America should be chiefly under foreign control. It is not a good thing that American merchants and manufacturers should have to send their goods and letters to South America via Europe if they wish security and dispatch. Even on the Pacific, where our ships have held their own better than on the Atlantic, our merchant flag is now threatened through the liberal aid bestowed by other governments on their own steam lines. I ask your earnest consideration of the report with which the Merchant Marine Commission has followed its long and careful inquiry.

The bill now pending in the House is a bill framed upon the report of that Merchant Marine Commission. The question whether it shall become a law depends upon your Representatives in the House. You have the judgment of the Postmaster-General, you have the judgment of the Senate, you have the judgment of the President; if you agree with these judgments and wish the bill which embodies them to become a law, say so to your Representatives. Say it to them individually and directly, for it is your right to advise them and it will be their pleasure to hear from you what legislation the interests of their const.i.tuents demand.

The great body of Congressmen are always sincerely desirous to meet the just wishes of their const.i.tuents and to do what is for the public interest; but in this great country they are continually a.s.sailed by innumerable expressions of private opinion and by innumerable demands for the expenditure of public money; they come to discriminate very clearly between private opinion and public opinion, and between real public opinion and the manufactured appearance of public opinion; they know that when there is a real demand for any kind of legislation it will make itself known to them through a mult.i.tude of individual voices.

Resolutions of commercial bodies frequently indicate nothing except that the proposer of the resolution has a positive opinion and that no one else has interest enough in the subject to oppose it. Such resolutions by themselves, therefore, have comparatively little effect; they are effective only when the support of individual expressions shows that they really represent a genuine and general opinion.

It is for you and the business men all over the country whom you represent to show to the Representatives in Congress that the producing and commercial interests of the country really desire a practical measure to enlarge the markets and increase the foreign trade of the United States, by enabling American shipping to overcome the disadvantages imposed upon it by foreign governments for the benefit of their trade, and by our government for the benefit of our home industry.

FOOTNOTES:

[12] There would be some modification of these figures if the cost of getting the mails to and from the exchange offices were charged against the account; but this is not separable from the general domestic cost and would not materially change the result.

SOUTH AMERICAN COMMERCE

ADDRESS AT THE NATIONAL CONVENTION FOR THE EXTENSION OF THE FOREIGN COMMERCE OF THE UNITED STATES, WASHINGTON, D. C., JANUARY 14, 1907

I thank you for your cordial greeting, and I thank you, Mr. Chairman, for the very kind terms which you have used regarding myself. I have come here with pleasure, not to make a prepared address, or to attempt oratory, but to talk a few minutes about subjects of common interest to us all.

I wish first to express the satisfaction that I feel in the existence of this convention. The process of discussion, consideration, mutual information, and comparison of opinion among the people who are not in office, is the process that puts under the forms of representative government the reality of freedom and of a self-governing people. The discussion which takes place in such meetings as this, and which is stimulated by such meetings as this, in the club, in all the local a.s.sociations and places where men meet throughout the country, is at once far removed from the secret and selfish devices of the lobbyist and from the stolid indifference which characterizes a people willing to be governed without themselves having a voice in government.

I congratulate you that you have come here to the nation's capital to discuss and consider subjects which are properly of national concern; that you have not come to ask the national government to do anything which you ought to do yourselves at home in your separate states, but to consider the exercise of the great commerce power of the nation, the power which from the beginning of our government has been fittingly placed in the hands of the national administration.

To my view we are advancing, and the whole world is advancing, in the opportunities and in the spirit and method which create opportunities for that kind of commerce which is profitable and beneficial to both parties the world over. Our relations continually grow more reasonable, more sensible and kindly with Europe and all the powers of Europe, with our vigorous and growing neighbor to the north, with our rapidly advancing and developing neighbors to the south, and with the nations that face us on the other side of the Pacific. Little occasions for controversy, little causes for irritation, little incidents of conflicting interests continually arise, as they do among friends and neighbors in the same town, but the general trend of international relations is a trend towards mutual respect, mutual consideration, and substantial good understanding.

Of course our relations to Europe, and our relations to the Orient, and our relations to Canada have long been much discussed and are worthy of discussion; but it seems to me that the subject which at this particular time opens before us with more of an appearance, and just appearance, of new opportunity than any other, is the subject of our relations to the Latin American nations to the south. I am not going to detain you by any extended discussion of that subject. I made a long--perhaps too long--speech about it before the Trans-Mississippi Commercial Congress at Kansas City a few weeks ago, and that has been printed in various forms and some of you, perhaps, have seen it or will see it. The substance is that just at the time when the United States has reached a point of development in its wonderful resources and acc.u.mulation of capital so that it is possible for us to turn our attention from the development of our own internal affairs to reach out into other lands for investment, for the fruits of profitable enterprise, for the expansion and extension of trade--just at that time the great and fertile and immeasurably rich countries of South America are emerging from the conditions of internal warfare, of continual revolution, of disturbed and unsafe property conditions, and are acquiring stability in government, safety for property, capacity to protect enterprise. So that we may look with certainty to an enormous increase of population and of wealth throughout the continent of South America, and we may look with certainty for an enormous increase in purchasing power as a consequence of that increase in population and wealth.

These two things coming together spread before us an opportunity for our trade and our enterprise surpa.s.sed by none anywhere in the world or at any time in our history.

It was with this view that last summer I spent three months, in response to the kind invitations of various Governments of South America, in visiting their capitals, in meeting their leading men, in becoming familiar with their conditions, and in trying to represent to them what I believe to be the real relation of respect and kindliness on the part of the people of the United States.

I wish you all could have seen with what genuine reciprocal friendship they accepted the message that I brought to them. We have long been allied to them by political sentiment. Now lies before us the opportunity--with their stable governments and protection for enterprise and property, and our increased capital--now lies before us the opportunity to be allied to them also by the bonds of personal intercourse and profitable trade.

This situation is accentuated by the fact that we are turning our attention to the south and engaging there in the great enterprise of constructing the Panama Ca.n.a.l. No one can tell what effect that will have upon the commerce of the world, but we do know that there never has been in history a case of a great change in the trade routes of the world which has not powerfully affected the rise and fall of nations, the development of commerce, and the development of civilization.

We, by the expenditure of a part of our recently acquired capital, are about to open a new trade route that will bring our Atlantic and Gulf ports into immediate, close intercourse with all the Pacific coasts of South and Central America, and which will bring our Pacific ports into immediate and close relation with all the countries about the Caribbean Sea and the eastern coast of South America. The combination of political sentiment which has long allied us with the Latin American countries, the opportunity which comes from their change of conditions and our increase of capital, and the effects that must necessarily follow the opening of the great trade route of the Panama Ca.n.a.l, all point to the development of American enterprise and American trade to the south.

Now, in considering that view of the future there are certain practical considerations that necessarily arise. How are we to adapt ourselves to this new condition? How are we to utilize this opportunity? One subject naturally presents itself, and that is the increase of means of communication through which our intercourse and our trade may be carried on. And that may be in two ways: one by the promotion of the railroad, long ago projected, and in constant course of development--the road that we speak of as the Pan American road. When we speak of the Pan American Railroad we are speaking of something of the future, and which exists today only in a great number of links, each of which has its separate name. They are being built, and being built with great rapidity. In Mexico, in Guatemala, in Bolivia, in Peru, in the Argentine, in other countries pieces of road are being built--many of them by American capital and American enterprise; some of them by capital coming from other countries--promoted by the strong desire of the people of these Latin American countries to break out from their isolation and to be brought into closer contact with the rest of the world. Those pieces are being built until now, when the work actually under contract is completed, there will be less than 4,000 miles remaining to be built to make a complete railroad which will unite the city of Washington with the city of Buenos Ayres in the Argentine.

One of the objects of the Rio conference last summer was to promote and further the interest of all American countries in the building of this road, and I am glad to believe that the action taken by that conference has had that effect. The line now running to the south is almost through Mexico--has almost reached the Guatemala line; and lines are being built in Guatemala to connect with that; and within the life of men now sitting in this room it will be possible for pa.s.sengers and merchandise to travel by rail practically the entire length of both the North and South American continents.

The other method of communication is by steamships. We are lamentably deficient in that. A great many fine, swift, commodious lines of steamships run between the South American ports and Europe and very few and comparatively poor ships run between those ports and the ports of the United States. No American line runs south of the Caribbean Sea. Our mails are slow and uncertain. It is a matter of hardship for a pa.s.senger to go directly between the great South American ports and the great North American ports, while the mails run swiftly and certainly to and from Europe, and it is a pleasure for a pa.s.senger to go between one of those ports and the European ports. The Postmaster-General reports that the best way for him to get the despatches from my Department to our ministers in South America with certainty and swiftness is to send them to Europe and have them sent from there to South America. That condition of things ought not to continue if we can prevent it.

One great reason why it exists is, that American shipping is driven off the seas by two great obstacles interposed in its way by legislation.

One is the legislation of foreign countries which has subsidized foreign shipping; the other is the legislation of our own country which by the protective tariff has raised the standard of living of all Americans--a most beneficent result--has raised the standard of living of all Americans so that American ships paying and feeding their officers and men according to the American standard cannot compete on even terms with foreign ships, the cost of whose officers and men is under the foreign standard.

If our Government will equalize these artificial disadvantages under which our vessels labor and will do for them enough to make up to them the disadvantage caused by raising the standard of living of the men they employ and to make up to them the disadvantage, coming from the fact that their foreign compet.i.tors are subsidized by foreign governments for the purpose of promoting foreign trade against American trade, we will have an American merchant marine and American ships to carry pa.s.sengers and freight and mails between South and North American ports. A bill to provide that is pending in Congress now. It has pa.s.sed the Senate. It is in the Committee of the House. I hope that all of you who agree with me in believing that our Government ought to be fair to the American merchant marine will say so out loud; say so to your neighbors; say so in such a way that American public opinion will realize that that kind of fair treatment is not a matter of the lobbyist, but is a matter of broad, American public policy.

There is one other subject--very important as a part of this general outlook and forecast of American policy looking towards the south. That is our special relation towards the countries, the smaller countries about the Caribbean, and particularly the West Indian countries, the islands that lie directly on the route between our ports and the Panama Ca.n.a.l. Some of them have had a pretty hard time. The conditions of their lives have been such that it has been difficult for them to maintain stable and orderly governments. They have been cursed, some of them, by frequent revolution. Poor Cuba, with her wonderful climate and richness of soil, has suffered. We have done the best we could to help her, and we mean to go on doing the best we can to help her.

I think the key of our att.i.tude towards these countries can be put in three sentences:

First. We do not want to take them for ourselves.

Second. We do not want any foreign nations to take them for themselves.

Third. We want to help them.

Now, we can help them; help them govern themselves, help them to acquire capacity for self-government, help them along the road that Brazil and the Argentine and Chile and Peru and a number of other South American countries have travelled--up out of the discord and turmoil of continual revolution into a general public sense of justice and determination to maintain order.

There is a good deal of talk in the newspapers about the annexation of Cuba. Never! so long as the people of Cuba do not themselves give up the effort to govern themselves. Our efforts should be towards helping them to be self-governing. That is what we are trying to do now and what we mean to try to do.

So with Santo Domingo. Poor Santo Domingo! With her phenomenal richness of soil, her people ought to be among the richest and happiest on earth; but the island has been the scene of almost continued revolution and bloodshed. Her politics are purely personal, and have been a continual struggle of this and that and the other man to secure ascendancy and power. She has come to us for help. She is burdened with an enormous amount of debt, much of it fraudulent, much of it created by revolutionary governments in the bush or by regular governments in distress, needing a little money to save themselves from being overthrown, in desperate circ.u.mstances, ready to make any sort of bargain, to pay any sort of interest, to promise anything to get immediate relief. Many debts have been created in that way and are hanging over her, foreign debts as to which she has pledged the resources of this custom-house to the creditors of this country, and of that custom-house to the creditors of that country, and of another custom-house to the creditors of the third country. She is unable to pay interest; unable to make any settlement because she could not give anything to carry out any settlement. With this enormous debt hanging over her like a pall, and with this record of continual revolution and strife depriving her of credit, depriving her of courage and of hope, she came to us to help her. And we are trying to arrange so that she may have the little--very little--moral support of the United States which is necessary to settle her debts, to insure the honest collection of her revenue and its application to carry out the settlement, and that she may be able to stand and walk alone. Now, we are trying to make an arrangement of that kind by a treaty; trying to perform the office of friendship and discharge the duty of good neighborhood towards Santo Domingo. I hope you wall take a little interest in this unfortunate neighbor and try to create a little interest in her on the part of our people; for our treatment of Santo Domingo, like our treatment of Cuba, is but a part of a great policy which shall in the years to come determine the relations of this vast country, with its wealth and enterprise, to the millions of men and women and the countless millions of trade and treasure of the great world to the south.

Our treatment of Santo Domingo, like our treatment of Cuba, is but a part of the working out of the policy of peace and righteousness as the basis for wealth and prosperity, in place of the policy of force, of plunder, of conquest, as the means of acquiring wealth.

The question is frequently asked, Should not a series of reciprocity treaties be adopted for the purpose of promoting our relations with these southern countries? That is not so important in regard to the South American countries as it might seem at first, because so greatly do the productions of North and South America vary that most of the products of South America already come into the United States free, as they are not competing with our products. Between eighty and ninety per cent of all our imports from South America are now admitted to the United States free of duty. The great country of Brazil--over ninety per cent of all our imports from there come in free of duty. So that the field to be covered by reciprocity treaties with those countries is comparatively narrow, and that question is not a question of first importance in regard to our relations with them. There are, however, some countries in regard to whose products I should like very much to see an opportunity to make reciprocity treaties.

But this opens up a broader subject. I do not think that the subject of reciprocity can now be adequately considered or discussed without going into that broader subject, and that is the whole form of our tariff laws.

In my judgment the United States must come to a maximum and minimum tariff.

A single straight-out tariff was all very well in the world of single straight-out tariffs; but we have pa.s.sed on, during the course of years, into a world for the most part of maximum and minimum tariffs, and with our single-rate tariff we are left with very little opportunity to reciprocate good treatment from other countries in their tariffs and very little opportunity to defend ourselves against bad treatment. Of course this is the side that I look at; this is my point of view. I may be wrong, but this is the way it looks to me--that any country in the world can put up its tariff against our products as compared with similar products from another country without suffering for it so far as our present laws are concerned. We go on taking that country's products at just the same rates as we did before. Any country in the world knows that if it puts down our products in its tariff it will get no benefit from it because we will have to charge it the same rates that we charge the country that treats us the worst. The maximum and minimum tariff would be free from one serious difficulty that arises in the negotiation of reciprocity treaties. That difficulty is this: When you make a reciprocity treaty with Country A, agreeing to receive certain products from that country at less than our tariff schedules, you are immediately confronted by Country B, which is equally friendly with us, treats us as well or perhaps better, and to which we cannot with good grace refuse the same. Then comes Country C with the same demand, and D and E. The result is that with that fair and equal treatment which we wish to accord to all countries there is a tendency, by means of successive reciprocity treaties, to change the whole form of the tariff, and to change it without that full and general discussion, without that deliberate consideration of the effect upon all American interests, which there ought to be in dealing with this complicated and interwoven business of tariff rates. Now, a maximum and minimum tariff would enable us to deal equally with all countries, as we are friendly, and ought to be, with all countries. It would be free from invidious discrimination; it would enable us to protect ourselves against those that use us badly, to reward those that use us well; and it would proceed upon a general and intelligent consideration of all interests.

There is but one other subject that I want to speak to you about, one to which the convention that met here last year contributed very much, and that is representation abroad under the American consular system.

The American consular service, I had the honor to say here last year, has been an exceptionally uneven one. There have been many very good men in it, and there have been many men in it who were simply pa.s.sing the remainder of their days in dignified retirement. That came along naturally enough when we did not have much foreign trade and we were not pushing much for foreign trade; but the strain on that machinery has of late years become rather great. We are pushing out in all the world for trade, and our people want information. Some of them need it--all want it--and they need to be well represented among the people of the other countries where they want to do business. And wherever there is a weak spot there is trouble and dissatisfaction. So that with changing times a change in method has become necessary.