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WHILE making a trip on
board the steamship Wenatchcc from Seattle to Shanghai during month of
April, 1921, I resumed the writing of my memoirs which I had
discontinued with the close of the year 1916. I commenced the year 1917
by presenting to the San Francisco T'heological Seminary, of San
Anselmo; California, a check for $50,000 to endow the Chair of New
Testament Interpretation, of which Dr. E. Wisher was the professor. The
endowment has been named "The Robert Dollar Chair."
In looking over my diary,
I find the following entry on the first of January: "I commence the year
in humble and perfect trust in God's guidance in all that is before me
during all of this year."
Getting together a number
of San Franciscans that were interested in the trade of China, we formed
what was called "The China Commercial Club," at the first meeting of
which there were forty prominent merchants present. The object of the
club was to increase and further develop the trade between China and the
United States, particularly the Pacific Coast. It turned out to be
successful in after years, and increased not only the trade, but the
friendship between the two countries, as many distinguished men were
entertained.
For many years I have
been a director of the Seaboard National Bank and lately of the Anglo &
London Paris National Bank, both of San Francisco; but as it is illegal
to serve on the directorates of two national banks, by mutual
arrangement with the presidents, I resigned from the Seaboard and my son
Stanley was elected to succeed me.
In January 1917 I
addressed a meeting of bankers at Oakland on the subject, "Foreign Trade
a Necessity to United States Prosperity."
A great deal of my time
was taken up attending meetings, I at that time being president of many
companies, Shipowners' Association, Y. M. C. A., Theological Seminary,
Merchants' Exchange, Douglas Fir Club, and others.
It was during this month
that 130 San Franciscans interested in increasing our trans-oceanic
trade, left on a special train to attend the Fourth Annual Meeting of
the Foreign Trade Convention at Pittsburg, Pa. On the 26th of January, I
delivered the following address, which was received with tremendous
applause.
ADDRESS BEFORE FOREIGN
TRADE CONVENTION
Mr. Chairman and
Gentlemen: What I am going to talk about are the conditions that existed
previous to the war, what they will be after the war, and present
conditions. I have often said, anybody can run a ship today and make
lots of money, but I am going to take you ahead to the time when we will
have to get down to the keenest competition the world has ever seen.
I want to say to you that
in foreign shipping' we are in competition with the whole world, and we
must meet the keenest and sharpest men the world produces in this
competition. It is certainly a man's job.
In a talk at New Orleans
I did not speak of the handicaps against American ships, but later, some
of the members, especially those from the Middle West, said they wished
I had mentioned them. I did not have the time to discuss the subject.
owing to the vast number of handicaps authorized by the Government.
Take, for instance, the
method of measuring an American ship. The American Government measures a
ship larger than any other nation. The result is, when its ships go to a
foreign country, from 20% to 30% more tolls are paid to the foreign
Government than the shipping of any other nationality. That amounts, in
a ship of 8000 tons deadweight measurement, to about $5500 a year
The extra cost of
inspection: An American has to lay a vessel up to be inspected. In a
foreign country, the inspector will say he wants to inspect your vessel,
and asks if you are ready and what you have ready. The inspector is told
what is ready, and, after 'iispectiug, a certificate of inspection for
that certain part is issued, and the ship proceeds to the next port,
where the inspection is finished. This method of inspection insures a
minimum of delay. But, instead of trying to work with the shipowner, our
Government says,^Stop work and wait until we can inspect your ship."
I had a ship in Honolulu
at one time on which the inspection certificate had expired. She was
held up. The nearest inspector was in San Francisco (there was none at
Honolulu). After telegraphing a number of times to Washington, we
finally got the consent of the authorities to send an inspector to
Honolulu. In the meantime our ship and crew were waiting there for the
inspector to come (laughter) at a cost to us of about $30,000 a year.
Then in the difference of
wages: I have the records in my books of the wage cost of operating
three ships; one an American ship, one a British ship and the other a
Japanese ship. The Japanese ship we chartered, but the other two T
owned. The wages on the American ship were $39,240 a year; the wages on
the British ship were $15,696 a year; and the wages on the Japanese ship
were $9324 a year. When we get right down to keen competition, this is
the kind of competition we are going to meet along with all the other
handicaps we have. I won't mention them now as it would take too long.
Mr. Furuseth of the
Seamen's Union, in planning the Seamen's Bill which has since been
enacted as a law, said his plan was to get every sailor that came to an
American port on a foreign ship to desert from his ship, and then
re-engage him at American -wages. In theory that was fine, hut in
practice it wasn't worth a cent. (Laughter.) He forgot that, according
to Japanese law, if a sailor deserts from a Japanese ship in a foreign
port, when he returns home he is put into jail for a year. Now, Mr.
Furuseth made provisions hi the Seamen's Bill, that the sailors of every
nationality who deserted their ships in the United States would return
on their own ships, or they would be taken in charge by our immigration
authorities and deported. lie did not take into consideration that the
Japanese would go back home and then straight into the calaboose on
arrival. (Laughter.)
Now, what I have to say
is this: Shipowners don't want a subsidy; because a subsidy, you know,
is to Congress like showing a red flag to a bull; but, if other nations
are paying their sailors $20 a month and the American wage is $50 a
month, and the Government wishes to keep this scale of wage, then let
the Government pay to every American sailor shipped, the extra $30 a
month. That will not be a subsidy, that wife only be a little help to
the poor men. (Laughter and applause.)
For the benefit of you
men who are not in the shipping business, I will say: When you hire a
man, the bargain is just between you and him; you lure him and lie works
for you. Not so in shipping. When we hire a crew for a ship we have to
take them before the United States Shipping Commissioner who explains to
the men the agreement and each man signs the shipping articles. Then,
when it comes to paying off, we are not permitted to pay each man, but
we must take the money and give it to the Shipping Commissioner and the
Shipping Commissioner pays him. You see, gentlemen, that the Government
comes in between to keep the wicked shipowner from "doing up"' the poor
man. (Laughter.)
Now, a question that you
gentlemen no doubt have often asked yourselves, is this; "What
difference does it make to us whether we ship our goods in a foreign or
American ship, provided the rate of freight is the same." It shouldn't
make any difference. But I will tell you where the difference comes in.
Take a shipowner running a ship from an American port; he is the best
drummer of trade you can get. because, as I have explained to you, he
will go to extremes to obtain a return cargo for his own port, and try
to increase the commerce of that port. But, if I were living in London
or in Liverpool, do you think I would be pulling for this United States?
Not at all. It is because I live in this country that I am a drummer for
the trade of this country and I try to keep my ships going. As an
illustration, I cited a case where we sent a ship clear around the world
to get back to our own country. That is the advantage of having ships of
our own.
Another thing. If a ship
is to come back in ballast, you gentlemen are going to play iust about
double for the freight going outward. A return cargo will almost cut
your freight bill in two.
The Emergency Act was
about the only thing that was passed by Congress that amounted to
anything at all in the way of helping American shipping, and that- was
drafted by a committee of this organization. But the ink had hardly
gotten dry on the President's signature, when down came the LaFollette
Bill, which practically crushed us out of existence. I have not time to
go into the details of that Bill, as it would take a half hour to tell
you about it, and you would be tickled to death with the explanation, if
I only had the time to give it. (Laughter.) That was by way of helping
the American Merchant Marine—over the left.
Now, I am going to read
these figures of the Department of Commerce report of last May,—just try
and keep them in your mind.
Before the war the
American tonnage from the Pacific Coast was 26.10% of the whole tonnage.
In May, 1916, after the beneficial LaFollette Bill had gotten ri its
deadly work, the American tonnage from the Pacific Coast was 1.97%.
Shall I read those figures over? Before the war, 26.10%, and after,
1.97%, after—you know what. (Laughter.)
Then, the British tonnage
before the war was 29.38%, and now, in May, it was 37.09%.
The German tonnage was
18.47%, which of course was wiped out.
Then, Japan. I want you
to take particular notice of this, gentlemen, and take it home with you,
if you will. Just make a note of it: Japan, before the war, did 26.05%
of the Pacific trade, and in May, 1916, 50.90%. That is the effect of
the LaFollette Seamen's Kill. You will notice the Americans went down to
1.97% and the Japanese ran up to 50.90%; and, if I had the statistics up
to the first of January, it would show an increase for the Japanese up
to and over 60%. They would not show any decrease for the Americans,
because we were right down to nothing. (Laughter.)
Then the Dutch came in.
Before the war they did nothing at all, but since the war they are doing
10%.
Those figures are very
significant taken mi connection with the legislation that is going on.
1 want to say to you
gentlemen that I am not making a political speech. The Republicans did
their worst to hurt the American Merchant Marine, and the Democrats were
only more successful because they were better at figuring—they were able
to do us up worse than the others. (Laughter and applause. ) You see
there is no discussion of politics in this.
Now I will give you just
one more illustration. The old Pacific. Mail Steamship Company paid no
dividends for thirteen years. How would you like it? (Laughter.)
Thirteen years between drinks. Think of it. Then the Seamen's Act became
effective, and if the company had remained in business it would have had
to pay $600,000 more a year.
The Seamen's Act provides
that a sailor can demand and receive half the wages due him. at any port
at which the ship arrives. Some of you don't know what sailors do when
they get their money, but I do.
When a ship of the new
Pacific Mail Steamship Company arrived at Honolulu, the crew asked for
and received half their wages, and all hands went up town. I don't know
what they did up town, but they forgot to come back. When the captain
was ready to start, the crew were not ready, so the ship remained there
a day waiting for the crew, and then proceeded to Yokohama. There the
same thing was repeated, only they brought whiskey aboard the ship.
While in Yokohama the company gave a banquet to a number of Japanese
gentlemen aboard the new ship after it had been inspected by the guests,
when the waiters got into a free-for-all tight right in the dining
saloon amidst the guests, and broke furniture as well as each other's
heads; then again at Kobe the dose was repeated. The company decided it
could stand it no longer, so sent to China for a Chinese crew. The
American crew were sent home as passengers, and the company continues
running its ships with Chinese crews. Do you blame it?
The Japanese, I will just
say, are increasing their trade to South America. Their trade to South
America during the past year has increased about 50%.
There is one thing more I
wish to say, that is: With these abnormally high freight rates where
shipowners are making money as never before, the Americans are out of
it, and the other nations are m it. Japan has increased her wealth so
much,—her balance of trade was just about even- but shipping has
increased her wealth to such an extent, that every steamer leaving San
Francisco, practically has from one million to two millions of gold—-the
balance of trade now being very much in her favor,—the result of
Americans not having a merchant marine. Gentlemen, I thank you.
Those meetings were very
successful and are gradually getting the people to appreciate the
necessity and importance of foreign trade. Credit for their success was
due largely to the leadership of James A. Farrell and other brainy men
who gave their time and influence to the Foreign Trade Council meetings.
I visited Washington and called on various members of the Government,
and had conferences with the new Shipping Board, who were trying to
devise ways and means of properly conducting this great undertaking. But
as time went on the situation became more and more complicated and
difficult to manage; until at the present writing it has reached a
deplorable state, there not having been a fully authorized board in many
months. There are now only two members on the board, neither of whom
have authority to do anything constructive, consequently business has
come to a standstill.
The situation has become
so acute and difficult that the present administration has been unable
to obtain the right kind of men to accept appointments to the Board.
The Act governing the
personnel provides that no one interested in shipping is eligible, the
inference being that all shipowners are men who could not be trusted—a
sad and unjust slur on the shipowners of the United States. Compare this
policy' w'.th that of Great Britain, where the biggest shipowners are
the active members of the Shipping Board, hence the great success under
their management. Also compare this British policy with the latest
Wilson appointments, where the majority are lawyers and newspaper men,
all honorable and good men. but utterly incapable of managing the
biggest merchant fleet in the world. It requires men of lifelong
experience in maritime affairs and shipping to successfully handle our
merchant fleet and this knowledge can only be had by the hard knocks of
personal experience and application.
The holding of ships at a
price more than four times the price of similar ships that other nations
are willing to accept, only goes to show that our Shipping Board >s
completely out of touch with the actual and true situation. Shipping
Boards have to do business throughout the world, and must meet the
competition of every nation, therefore, they must meet their rates not
only in the selling of ships, but also the rates of freight that all
others nations are willing to accept. Competition has gotten almost to
the point of a survival of the fittest, as there are afloat throughout
the world over twelve million tons of shipping more than existed before
the war in 1914, the chief cause for such great numbers of ships being
laid up today.
The Shipping Board
reports over half of its fieet laid up, and present conditions would
indicate that it will be many a day before all the idle ships are
employed. Besides all this, there are over six million tons of ships
building that w ill be in commission before the end of this year. Tank
steamers were scarce; but, there are so many now under construction that
it is a certainty many of them will be forced to lay up with the
freighters for lack of profitable business.
The situation in regard
to passenger steamers is different; many of them were lost during the
war, and very few were built as compared with ordinary freighters, so
that there is room for a few fast passenger steamers; but even in this
class of vessel the shortage is rapidly being made up, so that by the
end of this year I think there will be as many in commission as will be
required. One thing is sure as far as the Pacific Ocean trade is
concerned, by the end of 1922 there will be more passenger steamers in
commission than there will be business for them. So taking the ship
owning situation as a whole, it is going to be a survival of the
fittest, which will be determined by:
First. Those having the
most modern ships;
Second. The best
organization to secure world freight;
Third. The most
economically operated and best managed ships;
Fourth. Those best
equipped financially to 'weather the storm.
Those having the above
qualifications will come through pending the hard times we have just
entered into, and which we must expect and be prepared for all through
1921 and 1922, and perhaps longer; but human foresight cannot look very
far ahead. Put, as we have just passed through a period of prosperous
times, it is quite in order to take some of the bad.
I visited New York and
discussed with the leading shipowners, the shipping situation. I am
sorry to have met for the last tune, George Dearborn, president of the
American Hawaiian Steamship Company, who died shortly afterward; and
Willard Straight, who died in France. Had an interesting talk with F. A.
Vanderlip, the great financier. |
