The present depression and decline in American commerce has had few parallels. So marked has this depression become, that ssarcely any investment can be made with a leaner promise of profit than a purchase of shipping. Under this state of affairs a special Congress committee are engaged in trying to discover the causes for the decline, and if possible to apply a remedy. To this end a session was held by the committee in New York, ending Saturday the 16th October, in which a number 3f gentlemen, prominent in commercial circles, were examined. The general causes of the existing depression as elicited from these gentlemen, may be enumerated as follows : First, high prices of labor and materials. Second, depreciation in our currency. Third, increased cost of sailing our vessels after they are built, consequent upon injudicious taxation, as well as high prices. Fourth, the subsidizing policy of England which gives her commerce greai advantages not enjoyed by our shipowners. Fifth, the substitution of iron and steel vessels, in the building of wliich we cannot, under existing circumstances, compete with England. Sixth, the high duties on shipbuilding materials. In relation to the first four causes enumerated we cannot do better than to quote from the testimony of Mr. A. A. Low : "Most of our laws are framed with a view to protect our various industries, but the laws which generally protect our interests bear pretty heavy upon this special interest. They are really a burden upon our shipping interest." " By the Chairman.—We would like to have you give your views on the causes that have operated to produce this effect upon our commerce." " We have high-priced labor and material which enter into the construction of a ship, and we have a depreciated currency. We have the inoreased cost of the ship in the first instance and also the increased cost of sailing the ship after she is built. I think the American shipping interest had suffered before the war. The California trade had caused the building of high-priced ships, and in large numbers, and the traffic in that direction soon jiroved unre-munerative. The war came on, and the privateers burned our vessels. Insurance could not be obtained, and these com bined drove our commerce from the ocean. My own belief is that the policy of England in subsidizing lines of steamers to various ports of the world, has given her a prestige almost insuperable. "We have j usr now one important steam lino, and its property has been greatly injured since the completion of the Pacific Railroad. We liave given $60,000,000 to a railroad, together TOth lands, and, out of ah support from the Pacific Mail lines, I suppose ?? have suffered an injury of six or eight millions of dollars. " The capital of the line two years ago was $20,000,000; now it is $6,000,000. It would have been just as good now if it liad not been that Congress had given money to the railroad. There does not seem to be a law on the statute book that does not seem to inflict an injury.. Then the policy of England is perfect. They are a nation of large supplies ; they have manufactories in abundance to supply the distant markets; their colonial policy is excellent, and all their laws are in the interests of commerce. Our opportunities here for the employment of commerce are so great that our Legislature has not given them that advantage. I think they have acted wisely in subsidizing their lines. It is easier to tell the causes of the depression than to find the remedy. If subsi dies could be given to ocean iron steamers, it would be an offset to the extra cost of building them. My own impression has been that large subsidies should be given. These subsidies, wliile they cost the Government largely in the beginning, cost notliing in the end." Mr. LoAv also explained that the English Government allow all their steamers to receive their supplies from bonded warehouses, while American shipowners are obliged to pay duties on their'supplies. Mr. George Opdyke, ex-Mayor of New York city, a gentleman of acknowledged ability on all subjects connected with political economy, gave more prominence to the fifth and sixth causes above specified, but dwelt mainly upon the depreciation of our currency. He maintained that everything is about 75 per cent higher tli.an under the old currency. The American sliipbuildor has, therefore, to pay a diffrence of 75 iJor cent over the foreign shipbuilder. He thought it would be very many years before we can build ships of iron as cheaply as they can be built in Europe. As long as protection is the policy in this country we cannot expect them to make an exception in this regard. If we should adopt the policy of free trade, shipbuilding would increase. Subsidizing is another remedy. While he was opposed to all government subsidies, it would seem essential that we should try to control commerce, and that, to some extent, our Government should follow the policy of Great Britain. How far that policy should go, he was not prepared to say. He was opposed to it altogether, but from the present crippled condition ot our commerce we desire to regain the position that we once held, and he believed that it would be judicious tor the Government in proper cases where lines are established between this and other important countries, to meet Great Britain with her own weapons. The question arises. Can these causes be removed without great and permanent injury to other industries We believe they can. A sound protective policy does not merely imply indiscriminate imposition of duties ; and if the burdens of shipowners are too great they should b e 1 essened. Subsidies and drawbacks are protection in the most ultra meaning of the term. Permission to take supplies from bonded warehouses is only another form of protection.. England protects her commerce ; always has xirotected it. Let us now protect ours by the same means she employs, and, as Mr. Opdyke recommends, turn her own weapons against her.
This article was originally published with the title "Depression in American Commerce" in Scientific American 21, 19, 298 (November 1869)