REPORT OF AMERICAN MERCBANT MARINE COMMISSION. 39

means the maritime interests of Great Britain will understand that any injurious
discrimination on the part of that Government against our people and goods will
result in their exclusion from our indirect foreign freightage. ~ This may or may not
check hostile discrimination against us, but it will compel the consideration that
there is more than one side to the proposition and that the injuries which we can
and will inflict would counterbalance any possible benefits which that nation might
receive by any preferential action against us.
The Commission heartily approves this plan for self protection as
outlined by the commercial organizations of the Northwest, and recommends
 oA action to Congress not only in defense of our agricultural
Interests against a hostile policy, but as a possible and effective
method, if we are driven to it, of regaining for our ships an important
commerce now all but nny by the fleets of our aggressive
rompetitors.
THE TRANSPORT SERVICE.
. In the hearings of last summer at Puget Sound and San Francisco
it was discovered that mercantile sentiment on the Pacific coast very
earnestly demanded the abandonment of the transport service to and
from the Philippines, on which the Government had entered from
necessity in the Spanish war. This transport service has been practically
 suspended on the Atlantic Ocean; it is only on the Pacific that
it has been retained, and there it has been partly discontinued. But
several large transports, foreign-built vessels, are still in operation
between the Philippines and the Pacific seaboard, conveying not only
soldiers, but all manner of Government freight and supplies. and even
a considerable number of civilian passengers.
In other words, the Commission, instructed by Congress, on the
recommendation of the President, to investigate the feeble and even
desperate condition of the American merchant marine, found that the
Government itself was directly and powerfully contributing to the
decline of American merchant shipping on the Pacific Ocean by
operating rival lines of tforeign-built craft, and depriving American
vessels, in a time of profound peace, of a business to which they were
legitimately entitled. Not only this, but it was insisted that the Government
 was actually conducting this business at a very much higher
price than that for which American shipowners were willing to perform
the service.

"A MATTER OF BOOKKEEPING.
To all of the members of the Commission who visited the Pacific
coast, this procedure of the War Department appeared to be absolutely
 indefensible. It is true that in his recent annual report, the
Quartermaster-General of the Army figures out a profit of $398,236
for the transport service as compared with the rates which commercial
steamers would have charged, but this profit, as a matter of fact, is
altogether due to a radical difference in bookkeeping methods between
commercial steamship companies and the Quartermaster’s Department.
Steamship companies, like all other private business enterprises, are
compelled to pay taxes, to pay insurance rates—and marine insurance
is high—and to make large annual allowances for interest and depreciation.
 One of the witnesses before the Commission at San Francisco
was the major and quartermaster in charge of the army transport
service there. He was questioned as follows:
_ Representative Mivor, Major have vou in your calculation made any allowance
‘or deterioration?
Maior DevoL. No. sir.