American exporters were entering in competition with rivals who were already well established. To overcome the shipping disadvantage in part the registered merchant tonnage of the United States was increased by 283,771 tons gross during the fiscal years 1910 to 1914, and at least a million tons of foreign shipping was in 1914 owned by American capital although it was operated under foreign flags.

When the war in Europe began in 1914 more American manufacturers had their attention directed to the foreign trade because the trade which had formerly been conducted by German traders came to an end in the non-European markets and that of the Allied countries was restricted in volume. The increased trade between the United States and Argentina, Brazil, Peru, Chile, Japan, China, South Africa, Australia, Mexico, and Canada and other non-European countries was of mutual advantage for war conditions interrupted the usual trade of these countries and caused them to buy more American wares and also to sell more native wares to American importers. The non-European foreign trade lagged at first but it gradually began to increase although steamship services were limited by the urgent requirements of our European shipments and exports of many products were necessarily restricted by the War Trade Board.

A far more pronounced development during the war, however, was the readjustment and vast expansion of our industries for the production of war materials. It is this development of the war industries where the foreign trade in manufactures is likely to perform its principal function in the near future. In the readjustment of those industries to a peace basis there is no more promising field than the foreign trade. If sufficient markets can be found many of the steel plants which are making guns and munitions can make steel to be used in producing plow shares, tractors and farm implements, steel rails and other railroad materials, locomotives and cars, bridge girders, castings, steel plates, nails, wire, machine tools, electrical appliances, hardware, and the whole range of iron and steel wares that will be needed in growing amounts in the future development of the

world. Why should not the textile mills shift from army cloth to other fabrics, and leather manufacturers from army shoes to peace time leather goods, provided that markets are available to absorb the enlarged output of our great industrial plants. For a while the requirements of our domestic markets should be larger than they normally are because domestic improvements and even current maintenance have been deferred. For a while, too, quantities of manufactures as well as raw materials may be needed for the reconstruction of devastated Europe. Our industries and our enlarged merchant marine can render a signal service in this work of reconstruction. Meanwhile the permanent non-European markets for American manufactures should be developed as a promising means of minimizing whatever of industrial reaction may follow the return to a normal peace basis. As the industries of Europe have long depended more largely upon the foreign trade, so also must ours gradually supplement the domestic markets with a larger share of foreign trade. Normal business conditions in the future are likely to be different from what was regarded as normal in the past.

THE MERCHANT MARINE AS A FACTOR IN TRADE

It is in this promotion of the foreign trade that the prime function of our merchant marine lies when the ships which were built for war purposes will become available as merchant carriers. Foreign trade and ocean shipping may again become distinct professions as they were during the early decades of our national life. Our ships will provide the improved transportation services needed to enable our manufacturers to compete against foreign exporters who will assuredly return as business rivals. As the newly built vessels are assigned to selected routes the physical basis for a large foreign trade will be provided. The United States flag which was hardly ever seen at some of the maritime seaports, should become known throughout the world as the emblem of the square deal in

commerce.

The time has come when many of our industries can no longer look to the domestic trade to the exclusion of foreign markets.

As our industries grow their markets' needs have gradually become more like those of the industries in Western Europe. It is this need and the realization of it now manifested throughout the country that assures both the growth of our foreign commerce and the employment of a growing merchant marine. As in other countries, where Governments have long fostered shipping on the ground that ships are a national trade asset, so whatever may be done for shipping here will not be done in the interest of a few shipping and trading companies but in the interest of the whole country. Whether the newly built and acquired ships are operated by the Government or whether they are sold or chartered to private companies, a broad national policy is essential to their efficient utilization as a factor in trade. A part of heavy war costs incurred in building them should be charged to war expenditures just as any other expenditure made for war purposes. Whatever operating policy is pursued the ships should be assigned to the routes where they are most needed. If operated by private companies, contracts should be entered into so that the ships built at heavy expense will be used to the best interest of the largest numbers.

CHANGING OPERATING CONDITIONS

The bases for successful ship operation are rapidly being laid. Ocean ships and shipbuilding and repairing have been standardized to a degree unknown in American shipyards, except on the Great Lakes, since the days of wooden sailing vessels. Mechanical loading and unloading appliances, at least for bulk cargoes, similar to those which underlie the efficiency of traffic on the Great Lakes can be installed at ocean ports here and abroad to reduce terminal expenses and reduce the costly delays incident to pre-war methods of operation. In the shipment of supplies to Europe, for example, better organization of cargo and improved handling devices have enabled the Shipping Board to cut seventeen days from the time spent in port on the round-trip and ten days from the time spent in our home ports. Four hundred of the ships included in the Board's construction program, moreover, call for oil-burning ships, with all the

advantages incident to fuel economies, reduced numbers of men in the fire room, improved types of seamen and better morale. The Shipping Board moreover has been given power to supervise ocean pools, agreements and conference arrangements so as to retain their advantages and at the same time prevent them from obstructing the successful operation of new steamship lines. The use of fighting ships, the payment of deferred rebates designed to hold shippers in line, threats of retaliation by reducing space accommodations or applying other unfair methods to shippers patronizing non-conference lines have been prohibited. All regular ocean lines are similarly prohibited from unjustly discriminating between shippers or ports or from collecting charges that are unjust to American exporters as compared with their foreign competitors. The official ship measurement rules of the United States have since 1915 been so interpreted as to assure to American vessels a net register tonnage similar to that of British and German vessels, so as to place them on a more equal footing with regard to tonnage taxes, and such ship dues as are based upon net vessel tonnage. But the first essential to successful ship operation is the availability of cargoes. Regular lines cannot be operated efficiently unless there is a regular flow of cargoes over the routes selected. The merchant marine by providing improved services can do much to stimulate cargoes and trade-indeed, that is their prime purpose-but ships alone are not sufficient. There are other trade factors that also are essential. There must be an efficient producing, trading, and financing organization. To depend entirely upon the possession of a merchant marine would lead to certain disappointment.

It is gratifying that the importance of these trading factors too is being realized by a growing number of manufacturers, just as they have for some time been taken into account by that group of pioneer exporters who have sold American wares abroad with a marked degree of success. The national realization that exporting is not the work of a few days and that it embodies not alone shipping, is shown in the present activities of scores of manufacturers, merchants, traffic men, banks and

organizations of business men. The United States Government too has extended its trade promoting activities, although many of them had their beginning before the stress of war directed the attention of so many to the possibilities of the foreign trade.

The Bureau of Foreign and Domestic Commerce has sent commercial attachés and special trade agents abroad and has opened district offices and agencies in the larger American cities. It is continually collecting a mass of information which places it in a position to advise exporters regarding markets, tariffs and customs regulations, packing requirements, and trade methods. It assists American manufacturers in determining the type of wares salable abroad and during the past summer has also begun the publication of Spanish-English pamphlets setting forth American standard specifications of a group of articles so as to encourage their more frequent adoption in LatinAmerica. A Far Eastern Division has also been created to promote the commerce with Oriental nations, bordering on the Pacific Ocean. Our Commercial relations with the LatinAmerican countries owing largely to the American policy of anti-imperialism, moreover, are more cordial than at any time in the past.

The passage of the Webb Act of April, 1918, constitutes further evidence of the Government's intent. It was designed especially to induce manufacturers to enter the foreign trade who had formerly regarded foreign markets as a field exclusively for large concerns with sufficient capital and volume of business to warrant the establishment of an export sales organization. Some of them did of course export successfully through available indirect channels but few of the smaller concerns were in a position to export directly through their own sales forces. This act authorizes competitive manufacturers to cooperate in the sale of wares abroad without fear of the Sherman Antitrust law, provided their cooperative organizations are solely engaged in the export trade, that they do not result in restraint of trade within the United States, and that they do not engage in unfair methods of competition in the export trade. Subject