10 REPORT OF AMERICAN MERCHANT MARINE COMMISSION.

below the price asked from American yards, these steel mills simply
heap an unjust and intolerable burden upon an interest now well-nigh
prostrate.
A sense of fair play, or even cool business prudence, should make
it manifest to the steel companies that they ought to do their utmost
to encourage the struggling American shipyards. For, after all, the
best and permanent market for American ship steel must be in this
country and not in Europe.
AN EXTENSION OF THE LAW.

In view of these circumstances, the Commission recommends that
the law be so changed that the period during which ships built of free
materials are allowed to run in the coast trade be extended from two
months to six months; and also that the privilege of all-the-year-round
service now granted in the Atlantic-Pacific trade be extended to the
trade with the Philippines, which, on July 1, 1906, comes under the
coastwise laws and regulations. This especial treatment of ship
material can, we believe, be justified by the peculiar importance of
ocean shipping in the promotion of our commerce and the national
defense, and also by the fact that this ocean shipping has remained so
long an almost forgotten and unprotected industry.
But it must not be hastily assumed that even the absolutely free
importation of materials will of itself immediately reduce the cost of
American ships to the foreign figure. After all, the steel materials,
while a large are not the dominant factor in the cost of ship construction.
 For example, an 8,000-ton ship would require about 3,500 tons
of steel. Reducing the cost of all that material $8 a ton would reduce
the cost of the completed ship $28,000. But an 8,000-ton ship which
costs $450,000 in the United States can be built for from $100,000 to
$150,000 less in England. The real dominant factor is thus not the
price of materials, but the high wages of the skilled American workmen
 who fashion the plates and beams into the finished ship.

A SPECIFIC EXAMPLE.

Convincing proof on this point was offered in 1900, when steel plates
and beams, because of labor troubles abroad, were selling at $40.86 in
England, and $28 in the United States. Boston shipowners at that
time invited bids from an American and a British builder for a cargo
steamship of about 5,000 tons capacity. With both yards figuring for
a small competitive profit, the American estimate was $275,000 and
the English $214,000. The material of the American ship would have
cost $63,000; of the English ship, $80,000. But this difference was
more than offset by the higher wages paid to the American shipyard
mechanics.
However, the narrowing of the difference of shipyard labor cost
that will come with increased experience, improved standardizing and
constant production, as it has come already in the bridge and locomotive
 works, makes the reduced cost of materials a factor of undeniable
importance.
HIGHER SHIPBOARD WAGES.

But higher cost of construction, chiefly because of the higher range
of shipyard wages, is only one of the present handicaps on American
shipping in over-seas trade. There is also the higher range of wages