TRADE FOLLOWS THE FLAG.

Mr. GALLINGER presented the following

ARTICLE FROM THE SUNSET MAGAZINE OF MARCH, 1908, ENTITLED "TRADE FOLLOWS THE FLAG," BY H. A. EVANS, NAVAL CONSTRUCTOR, UNITED STATES NAVY.

MARCH 11, 1908.-Ordered to be printed.

TRADE FOLLOWS THE FLAG-THE

IMMEDIATE

INFLUENCE OF THE

AMERICAN BATTLE-SHIP FLEET ON THE COMMERCE OF THE PACIFIC.

[By H. A. EVANS, naval constructor U. S. Navy, from the Sunset Magazine, March, 1908.]

Does trade follow the flag? Ask an Englishman this question and he will express surprise that there should be any necessity for the question. To him the answer is self-evident-of course trade follows the flag. The history of his country proves conclusively that this is true, and it is an axiom in Great Britain that "trade follows the flag." The acceptation of this statement as an axiom in Great Britain, not only among the educated people, but also among the masses, has made it easy for the British Government to carry the flag to the ends of the earth, and the trade has always followed. This policy has made Great Britain commercially supreme. Germany has in the last few years been putting into practice the lesson taught by Great Britain, and is already reaping the benefits, and will soon be a strong competitor for the commercial supremacy of the world.

The great majority of the citizens of our country have thought little on this subject and to these the statement that trade follows the flag is not an axiom. It fact it is only recently that even a small proportion of the people of this country have considered this question. The country has been so prosperous and there have been so many opportunities for the great mass of the people to invest their money profitably at home that they have thought little of the commercial future of the country, and the possibilities of foreign trade. There are, of course, some who have realized the possibilities of foreign trade and the necessity for such trade, but these are few when compared with the great majority who have not given the subject a thought. Those who have had the opportunity of reading the report of the House and

Senate Merchant Marine Commission can intelligently answer the question, "Does trade follow the flag?" but the great majority of the people of this country are not prepared to answer the question.

It seems strange that on the Pacific coast, where this question is of such great importance, that there should be so little interest taken in it, and that there are so few who realize that it is of vital importance in the future development of the Pacific coast. In fact, the efforts made in Congress to revive the American merchant marine has met with but little encouragement on the Pacific coast and there has been no little opposition to the remedy proposed. This is indeed strange when the people of this coast have an example so near their doors of a nation that is taking advantage of Great Britain's example, and is extending her trade in every direction. After Japan has extended her steamship lines to every port on the Pacific and has built up a magnificent trade with every country bordering on the Pacific, and even beyond these limits, it will be very difficult for the Pacific coast to secure its share of the trade, which can now be had with but little effort. Japan some years ago realized the importance of a merchant marine and began its development by granting liberal subsidies. These subsidies were repaid many fold in the war with Russia. It was with these subsidized ships that the Japanese troops were transported and it was from these subsidized ships that the naval crews were drawn to defeat the Russian fleet. After the war the efforts to establish a great merchant fleet were redoubled. All ocean steamship lines were subsidized and a subsidy was also granted her shipyards. The result was the establishment of many magnificent shipyards which were immediately filled with new construction work and to-day Japan is increasing her merchant tonnage faster than any other nation in the world.

Why not now accept the teachings that Japan has accepted and at once take our share of the world's commerce? Unless this is done Japan will in a few years control the commerce of the Pacific as her share. Will this be satisfactory to the people of the Pacific coast?

Under the existing circumstances it is strange that there should be one dissenting voice on the Pacific coast to the proposition to aid the American merchant marine, for a great shipping means more to this Pacific coast than to any other section of the country. San Francisco, Portland, Seattle, San Diego, San Pedro, and Tacoma are not great manufacturing cities. The foundation for the greatness of these cities is their commerce. If their commerce is great or small, just so will be these cities. These cities are the gateways to the Pacific commerce of the entire country and this is what has brought them their present greatness.

Look at the great strides made by Seattle in the past few years. What has been the controlling cause? Does not everyone know that it is the great increase in commerce with Alaska? What would be the result to these cities if the commerce with the Philippines, Australasia, China, Japan, South America, Central America, and Mexico were doubled or trebled? Does not every business man in these cities realize that it would nearly double the importance of the cities and greatly increase their population? With our possession of the Philippines we have an enormous advantage in securing the trade of this country. At present it amounts to almost nothing. The exports from San Francisco to the Philippines for the twelve months ending November 30, 1907, amounted to but $1,470,000, while the exports to little

Hawaii for the same period amounted to $10,270,000. This trade can be built up and made of great value to the country as a whole and of enormous value to the Pacific coast.

The trade of the Pacific coast with South America amounts to next to nothing, the total exports from San Francisco to all the South American countries for the past year being less than half a million dollars. With a regular line of steamers under the American flag running from San Francisco to the South American ports this trade could be made very valuable. Our trade with China, Japan, Australia, and New Zealand is of much value now, but will anyone assert that it is half what it should be? Will anyone assert that it can not be enormously increased? There is no doubt that this can be done, but how can this best be done? It can best be done by carrying our exports to these countries in American ships, manned by American officers and sailors. The establishment of new lines of American steamers to these countries with frequent regular sailings and with sufficient aid from the Government to enable them to compete with the cheap foreign ships manned by poorly paid crews will be a great impetus to the trade of this coast with these countries. Furthermore, the establishment of these lines, the ships of which would be built and repaired in the Pacific coast ports, will revive the shipbuilding and repairing industries on this coast.

These industries were once great and gave work at good wages to thousands of skilled mechanics, but are now reduced to small repair establishments. Foreign ships repair in our ports only when it is impossible to return to their home ports for repairs. American ships by law follow the same rules, and the docking and repair of the fleet that we should have on the Pacific would in itself create an industry which would furnish employment to thousands of skilled men.

Without aid to American steamships from the National Government, the establishment of new lines or even the continuance of the present lines is impossible. Unless such aid is given, the country will turn its commerce over to foreigners to do with it as they will. Shall we do this and rely on them to find new markets for our products and advertise and push our trade in these markets? Do we believe that we shall get the best results in this way, or do we expect to even obtain fair treatment? Will, for instance, the Japanese agents in Australia of a Japanese steamship line advertise and push the sale of American products, or will the agents of a German line push the sales of American products in preference to German products? Will these foreign lines and their agents even give American products a fair showing? There are some products, such as food stuffs, in which we have a monopoly. It is not difficult to sell these, as the world must have them or starve; there are others produced by Germany, England, Japan, and other countries, and it is to these that particular reference is made. Do we believe that the foreign steamship lines will give the same treatment to the products of this country as they will to their home products, and can we expect these lines to build up markets for our goods to the exclusion of their home industries? If we do, then we believe that trade does not follow the flag. The industrial history of England and the recent history of Japan proves, however, that trade does follow the flag and that the establishment of new lines of steamers to foreign markets brings new trade to the country which flies the flag over those steamers.

In the report of the Merchant Marine Commission, presented to Congress in 1905, this subject is interestingly presented in the following words:

Not only is an American ship itself the most efficient carrier of American commerce, but the officers of that ship, the American passengers who tread its decks, and particularly the American merchants who go out to represent the steamship company and to push its business, are inevitably pioneers and drummers of American trade in foreign lands. For years our ministers and consuls and American travelers abroad have complained that there were no American mercantile houses in foreign countries, and that American goods, therefore, had to be handled by foreign firms which preferred to sell their own country's merchandise. But why should there be any American houses in South America, or Asia, or Africa, or elsewhere where there are no American ships? Everywhere in the world's experience it has been found that the first merchants who go out to foreign countries go as agents of shipping. Soon goods from the home country are consigned to them; they develop a commission business; they branch out into general mercantile trade and growing stronger, demand banking facilities.

There were once American houses in China, India, and South America, but that was when we had American ships on whose trade their foundations rested. When these ships vanished the houses themselves soon disappeared. When American ships return, there will again be American mercantile establishments in all ports of the world to push the sales of American goods abroad with the same shrewd sense and indomitable energy that have built up our enormous domestic commerce.

The Pacific coast is more interested in the trade of the Philippines, Asia, Central America, South America, Australasia, and Japan. The first five of these have no ships of their own and must depend on foreign ships both for their exports and imports. The great maritime nations, England and Germany, pay liberal subsidies for new lines of steamers. These two nations have already built up a valuable trade with these countries and this trade is greatly increasing in value every year. Japan has in the past few years followed the same policy and the increase in her commerce has been marvelous. Can the United States expect to increase its trade with these countries, without its own steamship lines, with other commercially aggressive countries in the field, fully equipped with adequate carrying facilities? If it does it will be the first case in the commercial history of the world.

The influence of the flag on commerce is well shown by the increase in exports from this country to Australasia due to the Oceanic Line from San Francisco. The exports from the United States increased from $12,600,000 in 1896 to $27,400,000 in 1904. Now that this line to Australasia has been forced to go out of business on account of lack of aid from our Government, which would enable it to compete with foreign ships, it will be sad but interesting to note that the increase in this trade will soon cease or more probably actually decline in the next few years.

Aside from the great advantages to the whole country of a great foreign trade, it is the very lifeblood of the Pacific coast ports. Without commerce these great cities would be unimportant towns, with only local industries to support them. The greater the foreign trade the greater will these cities be, and the more this trade is carried in American bottoms the more rapidly will the trade increase.

What is to be the influence of the future great Pacific naval fleet on the trade of the Pacific?

A great navy and a great merchant marine go hand in hand. Neither can long exist without the other. If a great navy is attempted without a correspondingly great merchant marine, it will be impossible to provide trained men for the Navy. Even with our moderate-sized