CHAPTER VI.

NEW ENGLAND'S SHIPPING INTERESTS (CONTINUED). - NAVIGATION LAWS.

"An oak vessel could be built at Gloucester or Salem for $24 per ton; a ship of live-oak or American cedar cost not more than $38 per ton. On the other hand, fir vessels built on the Baltic cost $35 per ton, and no­where in England, France, or Holland could a ship be made of oak for less than $50 per ton. Often the cost was as high as $60. "

- Fiske's Critical Period, etc., pages 141-42.

To the general discussion of New England's shipping interests in the preceding chapter, let us now enter upon an examination of the different laws passed for their benefit, except the fishing bounty acts, which will be found in the next chapter.

It is a matter of curious interest that the clause of the Federal Constitution conferring upon the Congress the power to regulate commerce was the result of a compromise between the agricultural interest of the South and the shipping interest of the Northeastern States. In Mr. Charles Pinckney's plan of a Constitu­tion, which presented the general form and much of the substance finally agreed to, he proposed to grant this power with a very salutary proviso, inspired, perhaps, by that distrust of the commercial interests which seems to have been shared by many of the Southern delegates to the Convention.¹ It was that any act regulating commerce should require a two-thirds vote in its favor in each House.

The subject was debated for months, and fruitless efforts were made by the Northeastern delegates to have the proviso stricken out. At last an opportunity for a "bargain" arose. This was when the question was to be settled whether the Congress should have the power to prohibit the importation of African slaves. "As the system," says Luther Martin of Maryland, who was a member of the Convention, "was reported by the Com­mittee of Detail" (the Committee of Five who reported the final draft), "the provision was general, that such importation should not be prohibited, without confin­ing it to any particular period. This was rejected by eight States, Georgia, South Carolina., and, I think, North Carolina, voting for it. We were then told by the delegates from the two first of those States that their States would never agree to a system which put it in the power of the general government to prevent the importation of slaves, and that they as delegates from those States must withhold their assent from such a system. A committee of one member from each State was chosen by ballot to take this part of the system under their consideration and to endeavor to agree upon some report, which should reconcile those States. To this committee also was referred the following proposi­tion, which had been reported by the Committee of De­tail, to-wit: 'No navigation act shall be passed without the assent of two-thirds of the members present in each House'; a proposition which the staple and commer­cial (agricultural) States were solicitous to retain, lest their commerce should be placed too much under the-power of the Eastern (New England) States; but which those States were as anxious to reject. This committee, of which I also had the honor to be a member, met and took under their consideration the subject committed to them. I found the Eastern States, notwithstanding their aversion to slavery, were willing to indulge the Southern States, at least with a temporary liberty to prosecute the slave trade, provided the Southern States would in their turn gratify them by laying no restric­tion on navigation acts; and after a little time the com­mittee, by a great majority, agreed on a report," which was acceptable to both parties.²

Such was the compromise: the Southern States re­tained the power until 1808³ to purchase Africans im­ported by New England's slave traders, with the proviso lodged somewhere (nobody knows where) that the Northern States could liberate and enfranchise them; and the Eastern States secured to themselves the power to have navigation acts passed by a bare majority of a quorum in each House - one more than a fourth of the total membership - instead of two-thirds of the mem­bers.⁴

But in truth this was only a seeming compromise; it was a surrender of two rights by "the South," and a surrender of no right by the North. The right to import slaves forever belonged to each of the Southern States, as did the right to go into the open market and employ the cheapest ships for their coastwise and foreign commerce. Both rights they lost in the so-called com­promise, and received absolutely nothing as an equiva­lent. Truly did Greeley say (2, p. 232) that "the Con­stitution was essentially a matter of compromise and mutual concession - a proceeding wherein Thrift is apt to gain at the cost of Principle."⁵

This power being delegated to the Congress, its exer­cise was entered upon with eagerness before measures were adopted to organize the Treasury or State Depart­ment, or the Supreme or any other courts. In the Sen­ate, according to Maclay, when the clause in the bill was reached granting a partial monopoly to "all ships or vessels within the United States, and belonging wholly to citizens thereof," Izard, of South Carolina, moved to have the latter part struck out, "the effect of which would have been that no discrimination would have been made between our own citizens and foreign­ers." Lee and Grayson, of Virginia, Butler and Izard, of South Carolina, and Few, of Georgia (North Carolina was not then in the Union), "argued in the most un­ceasing manner" against the discrimination, but to no purpose.

The act became a law September 1, 1789; and even Maclay, a supporter of it, was compelled by his sense of justice to make this admission: "In a view solely mer­cantile, this was perhaps wrong, as by these means our foreign articles would be dearer and our home produce cheaper."⁶

This remark referred to the foreign trade, and was written before the coastwise-trade provisions were reached. These gave to "American" vessels an abso­lute monopoly of the carrying trade between ports of the United States, and enabled their owners to fix freight rates on naval stores, lumber, pork, indigo (when it was a Southern crop), wheat, flour, cotton, tobacco, and rice shipped to Northern markets, and on Northern and foreign goods shipped from Northern to Southern ports.

The discriminations in favor of "American" ships will be seen in the following acts:

TONNAGE⁷ DUTIES.

1. The Act of July 20, 1790, amending the Act of September 1, 1789, but not changing rates: "Upon all ships or vessels which, after the 1st day of September next, shall be entered in the United States from any for­eign port or places, there shall be paid the several and respective duties following, that is to say: on ships or vessels of the United States at the rate of six cents per ton; on ships or vessels built within the United States, after the 20th day of July last, but belonging wholly or in part to subjects of foreign powers, at the rate of thirty cents per ton; on other ships or vessels at the rate of fifty cents per ton."

2. The Act of January 14, 1817, reenacts the rates of the above act, with a proviso that there shall not be any impairment of rights acquired by any foreign na­tion under any treaties or other commercial agreements.

3. The Act of March 1, 1817, makes certain discrimi­nations in favor of licensed vessels; and imposes fifty cents per ton on vessels of the United States if the offi­cers and at least two-thirds of the crew are not citizens of the United States.

4. The Act of May 31, 1830, provides that no tonnage duties shall be paid on vessels of the United States; nor on the vessels of any foreign nation which levies no dis­criminating or countervailing duties, "to the disadvan­tage of the United States."

LIGHT MONEY.

The Act of March 27, 1804, lays a duty of fifty cents per ton, "to be denominated ' light money,' "on all ships or vessels, not of the United States, -"which... may enter the ports of the United States"; provided that this act shall not contravene any provision of the treaty with France.

RESTRICTIONS ON FOREIGN VESSELS.

The Act of March 1, 1817, contained this provision: "After the 30th day of September next, no goods, wares or merchandise shall be imported into the United States from any foreign port or place, except in vessels of the United States, or in such foreign vessels as truly and wholly belong to the citizens or subjects of that country of which the goods are the growth, production, or manu­facture; or from which such goods, etc., can only be, or most usually are, first shipped for transportation: Pro­vided nevertheless, That this regulation shall not extend to the vessels of any foreign nation which has not adopted and which shall not adopt a similar regulation."

COASTING TRADE.

1. On February 18, 1793, the Act of September 1, 1789, was amended to this effect: "Ships or vessels en­rolled by virtue of 'the last-named act,' and those of twenty tons and upwards, which shall be enrolled after the last day of May next, in pursuance of this act, and having a license in force, or, if less than twenty tons, not being enrolled, shall have a license in force, as is hereinafter required, and no others, shall be deemed ships or vessels of the United States, entitled to the privileges of ships or vessels employed in the coasting trade or fisheries."

2. For some reason - probably evasions of the law - it was enacted, March 1, 1817, that: "No goods, wares, or merchandise shall be imported, under penalty of forfeiture thereof, from one port of the United States to another port of the United States, in a vessel belong­ing wholly or in part to a subject of any foreign power."

3. On May 27, 1848, an act was passed to permit these privileged vessels (including steamships) to touch at foreign ports for merchandise and passengers.⁸

DISCRIMINATING DUTIES.

The tariff act of July 4, 1789, imposed discriminating taxes on tea imported from China, as follows (per pound):

This same act allowed a reduction of 10 per cent of the rates of duty imposed on all foreign goods, if im­ported in United States vessels; and while imposing a tax of 12 ¹/₂ per cent on all articles (other than tea) com­ing from China or India, it permitted them to come in free of duty in ships built or owned in the United States.

And as if this were not favoritism enough, the Act of May 13, 1800 - the last year of the domination of the Federalists - provided: "That in case of, the re-exporta­tion from the United States of goods, wares, and mer­chandise, imported thereinto in foreign ships or vessels, no part of the additional duty imposed by law on such goods, etc., on account of their importation in such ships or vessels, shall be allowed to be drawback," etc.

"HOME MARKET" FOR SHIP BUILDERS.

The Act of December 31, 1792, provides as follows:

"Ships or vessels built within the United States, whether before or after the 4th of July, 1776, and be­longing wholly to a citizen or citizens thereof; or not built within the said States, but on the 16th day of May, in the year 1789, belonging and thenceforh continuing to belong to a citizen or citizens thereof; and ships or vessels which may hereafter be captured in war by such citizen or citizens, and lawfully condemned as prize, or which have been or may be adjudged to be forfeited for a breach of the laws of the United States, being wholly owned by a citizen or citizens thereof, and no other, may be registered as hereinafter directed," etc.

This act, which has never been repealed, compels every person, corporation, State, and even the United States, whenever a necessity arises, to purchase, lease or employ in any way any ship or vessel, to make the purchase, etc., in the "home market"; and it is not necessary to assure the reader that every advantage has been taken which the act permits.

More than a century has this monopoly been fleecing the people, either directly, whenever they have had oc­casion to purchase or hire a vessel, or indirectly, through the military branch of the Federal Government when­ever it has needed to purchase or hire transports for troops or war material. The delay in transporting troops, etc., to Cuba, Manila, etc., during the present war with Spain is familiar to readers of newspapers. "Outrage­ous prices," as the Philadelphia Record calls them, have been charged by the ship-owners. On the 17th of Sep­tember, 1898, a check for $1,475,000 was given in pay­ment of the rental of four ocean steamers of the American line, which were in the Federal service "for an average period of nearly one hundred and twenty days." This is about $3,070 per day for each ship, or $820,550 per year; and the last sum is about five times the total cost ($165,868) of the fifteen iron and steel steamships built in Pennsylvania in 1889. - Census, 1890, Manf. Ind., Part 3, 564.

How large a stream of wealth this paternalism has caused to flow from the South to the North, and chiefly to New England, we may never know; but we may not err greatly if we draw inferences from the parallel pater­nalism complained of in the address to "the Inhabitants of Great Britain," July 8, 1775, by "The Twelve United Colonies," as follows: "It is alleged that we contribute nothing to the common defense. To this we answer that the advantages which Great Britain receives from the monopoly of our trade far exceeds our proportion of the expense necessary for that purpose."⁹ And we may reach a more definite conclusion from the testi­mony of a witness who had opportunities of observing the operations of these laws. It was Mathew Carey, who, on page 268 of his Olive Branch, said:

"The naked fact is that the demagogues in the East­ern States, not satisfied with deriving all the benefits from the Southern States, that they would from so many wealthy colonies - with making princely fortunes by the carriage and exportation of their bulky and val­uable productions - and supplying them with their own manufactures, and the manufactures and productions of Europe and the East and West Indies, to an enor­mous amount, and at an immense profit, uniformly treated them with outrage, insult, and injury."

To him may be added another witness, who is quoted by Carey on page 291. It was John Lowell, the foun­der of Lowell Institute in Boston.

In his Road to Ruin, objecting to the transfer of cap­ital from commerce to manufacturing, he declared that commercial gains were 50 per cent, while factories could never yield more than 20 per cent!

And the testimony of these witnesses is corroborated by the extent of the operations of those engaged in com­merce. Their sails whitened every harbor in the com­mercial world; through their agents foreigners received their impressions of the character, skill, enterprise, and spirit of the people of all these States; and, when the War of 1812 commenced, the whole people, from the Gulf of Mexico to the Canadian border, had lost much of that respect abroad which had been inspired by their conduct in the Revolution. "There existed a general impression among civilized nations," says the States­man's Manual, Volume I, page 376, "that the spirit of liberty and independence which had carried America triumphantly through the war of the Revolution, was extinguished by a love of gain and commercial enter­prise, without courage and resolution sufficient to sus­tain the National rights."

The effect of the first act (September 1, 1789) was magical; the tonnage employed in the foreign trade rose from 123,893 in 1789 to 346,254 in 1790; that en­gaged in the coasting trade rose from 68,607 to 103,775 in the same period; and that engaged in the cod and mackerel fisheries (with the additional stimulus of bounties and drawbacks explained elsewhere), rose from 9,062 to 28,348 in the same period.¹⁰

The Act of February 18, 1793, providing for favors to vessels of less than twenty tons, employed in the coast­ing trade, was equally magical; the tables drawn on above give 7,218 tons for that year and 16,977 for 1794.

As might be expected, the foreign commerce of the United States rapidly fell into the hands of those who enjoyed a monopoly of the coasting trade; so that before 1795 they controlled 75 per cent of it; from that year to 1800, 87 per cent; and by 1810 they had reached 91 per cent.¹¹ From the last-named year until 1831 it never fell below 86 per cent; but about that time the policy of mad protection - the "bill of abominations" - was beginning to allure capital from commerce to manufacturing; and the American tonnage fell to 77 per cent, from which it never recovered. Indeed, the still mad­der protection the country was afflicted with by the war tariffs ran the per cent down to 19 in 1881; and, not­withstanding all the extra coddling by exemptions from fees¹² and from taxes on ship materials,¹³ and by boun­ties for carrying the mails,¹⁴ etc., the high-water mark of 1895 was only 23 per cent.

Two observations should be made here. The first is that many Southern statesmen in the early Congresses supported and voted for the measures designed to foster the shipping interests, for the double purpose of insur­ing a powerful merchant marine which might render valuable service in case of war, and of pacifying the commercial class in New England who threatened to withdraw their States from the Union whenever their interests seemed to be losing the paternal care of the Government.

The other is that the farmers of the South, enjoying a satisfactory degree of prosperity, having no railroads or other means of rapid communication with the people of the Northern States, enjoying none of the modern facilities for informing themselves, and trusting all pub­lic matters to their political leaders, saw no reason why they should abandon their farms and enter into a com­petition with the experienced ship-builders and traders of the North. They did not realize the stealthy trans­fer of their wealth to the Northern States until it was too late to hope for an efficient remedy, and even then only a very small per cent of them could be made to understand the causes of their financial decadence. But even if Southern capital had been directed to this com­petition, the wealth of the farming class would have flowed from them as before, the channel alone being changed. So there was no hope of recovering his lost wealth or of securing the benefits of fair and honorable commercial competition; and the intelligent farmer began to doubt whether he was having his share of the blessings of liberty, to secure which his forefathers had carried his State into the Union.

And this injustice is still irremediable.

1. For some reason the New Englanders made unfavorable impres­sions on others besides the Southerners. In the Journal of Wil­liam Maclay, one of Pennsylvania's first Senators, two opinions are recorded, which were kept by him and his family from publication for a century. The first is on page 260, as follows: " I would now remark, if I had not done it before, that there is very little candor in New England men." The second is on page 341: "For my knowl­edge of the Eastern character warrants me in drawing this conclu­sion, that they will cabal against and endeavor to subvert any gov­ernment which they have not the management of."

2. Yates's Secret Proceedings and Debates of the Convention of 1787, pages 62-63.

3. The compromise, as agreed to in the committee, and reported to the Convention, provided for non-interference with the slave-trade till 1800; but the next day (August 25) "it was moved and seconded" to strike out 1800 and insert 1808, and this was agreed to, the yeas being New Hampshire, Massachusetts, Connecticut, Maryland, North Carolina, South Carolina and Georgia; and the nays, New Jersey. Pennsylvania, Delaware and Virginia. - El. Deb., 1, 264.

4. See Constitution, Article I, sections 5, 8 and 9; and Note H.

5. An example of misrepresentation of truth is seen in the following reference to this so-called compromise on page 255 of Fiske's Civil Government: "There was some sectional opposition between North and South, and in Virginia there was a party in favor of a separate Southern Confederacy. But South Carolina and Georgia were won over by the concessions in the Constitution to slavery, and especially a provision that the importation of slaves from Africa should not be prohibited until 1808."

6. Maclay's Journal, pages 76, 77.

7. The burden or tonnage of a ship is its capacity in cubic feet. Webster's Dictionary says a ton is about forty cubic feet; Alden's Cyclopcedia says 100 cubic feet make a ton; but the act of Congress establishing rules for measuring the capacity of a vessel makes 95 cubic feet a ton, which is about 76 bushels. - Act of March 2, 1799.

8. "And what does New York enjoy? What do Massachusetts and Maine enjoy? They enjoy an exclusive right of carrying on the coasting trade from State to State, on the Atlantic, and around Cape Horn to the Pacific.... It is this right to the coasting trade, to the exclusion of foreigners, thus granted to the Northern States, which they have ever held, and of which, up to this time, there has been no attempt to deprive them; it is this which has em­ployed so much tonnage and so many men, and given support to so many thousands of our fellow-citizens. Now, what would you say... if the South and the Southwest were to join together to repeal this law,... and invite the Dane, the Swede, the Hamburgher, and all the commercial nations of Europe who can carry cheaper, to come in and carry goods," etc.?

- Webster to the Young Men of Albany, May 28, 1851.

9. N. C. Col. Recs., X, 81.

10. Commerce and Navigation of the United States, 1891, page 1086.

11. Ibid., page CVIII.

12. By the Act of June 26, 1884, the Secretary of the Treasury was directed to pay to United States Consuls the fees theretofore re quired to be paid by masters of vessels and seamen; and the Act of June 19, 1886. directed that officer to pay fees theretofore paid by masters, engineers, pilots and mates of vessels, as for measuring ton­nage, issuing license, bill of health, inspecting, granting certificates, granting permits, etc., etc.

13. The policy of exempting ship material from import taxes was in­augurated by the Act of June 6, 1872; and it has been pursued ever since. But the Dingley Act goes beyond this; it provides in sec­tions 12, 13 and 15 that "all materials of foreign production which may be necessary for the construction of vessels built in the United States for foreign account and ownership, or for the purpose of be­ing employed in the foreign trade, including the trade between the Atlantic and Pacific ports of the United States, and all such mate­rials necessary for the building of their machinery, and all articles necessary for their outfit and equipment," or "for the repair" or "for supplies (not including equipment) of vessels of the United States engaged in foreign trade, or in trade between the Atlantic and Pacific ports of the United States," shall be exempt from tariff or internal revenue taxes.

14. No longer ago than 1892 Mr. Postmaster General Wanamaker reported that between February 1 of that year and June 80 he paid out to four steamship lines $77,103.85 more than the service was worth; and his estimates for the next year cover a bonus of $610,639 to nine lines. - (See his Report for 1892, pp. 10 and 11.)

And Postmaster-General Bissell, in his report for 1894, page 22, says that a bonus or subsidy of $257,779 was paid that year, under one of Mr. Wanamaker's contracts, to three steamship lines.

NOTE H.

The provision of the Constitution empowering a quorum to do business, thus enabling one-fourth plus one of the total membership to pass important acts, provided they are voted against by one-fourth, has led to unforeseen evil results (unless we except Mason and Randolph, of Virginia, who refused to approve and sign the Constitution because this "two-thirds" provision was stricken out). If a two thirds vote had been required on all bills laying taxes and making appropriations, the tranquillity of the Union might never have been disturbed.

The protective tariff of 1816 was passed in the House of Represen­tatives by the affirmative votes of 88 out of a total membership of 183, or 48 per cent.

The "American System" of 1824 was passed by 107 out of 213, or 50 ¹/₅ per cent.

The "bill of abominations" of 1828 was passed by 105 out of 213, or 49 per cent.

The tariff act of 1832 was passed by 132 out of 213, or 61 per cent.

The tariff of 1842 was passed by 103 out of 243, or 42 per cent.

Thus it is seen that the tariff acts up to 1861 - those acts which caused, directly or indirectly, nearly all the excitement and antago­nism in the Union - were imposed on the people by minority votes, with two exceptions; and that the act which laid the foundation for the threatened rupture in 1832 was passed by 49 per cent of the to­tal membership.

But during all these years the people were flattered by the politi­cians with rhetorical flourishes about "American citizens," "demo­cratic government," "the popular will," etc.

This minority government is going on yet, and will continue to do so as long as the people believe they are living under a "govern­ment of the people, and by the people, and for the people."

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