3 REPORT OF AMERICAN MERCHANT MARINE COMMISSION.

experience in ownership under both American and foreign flags, estimates
 that an American-built steamship, suitable for the North
Atlantic trade, would cost about 40 per cent more than a Britishbuilt
 steamship. ‘This is a formidable difference in a 12,000-ton
steamer costing upward of two million dollars. Indeed, it happens
that just at present there prevails in England the period of dullness
which alternates with activity in shipbuilding, as in every other
industry the world over. To keep their machinery in use and their
workmen together, British builders haye recently hid for new construction
 at unprecedently low rates, which mean, probably, a loss and
certainly no profit. Some of these British “panic” bids have been
but about one-half of what an American yard, figuring for a small
profit, has asked for a similar vessel.
If the normal range of ship cost between the U nited States and
Great Britain were as wide as this, the problem of creating an
American-built merchant fleet for ocean trade would manifestly be
almost hopeless. But such a difference is not normal; it is temporary;
indeed, it is even now passing away. Recent actual bids of American,
British, and German yards for typical North Atlantic steamships,
which have been communicated to the Commission, show an American
excess of cost of about 47 and 37 per cent—the German figure being,
significantly, the lowest. In the hearing at Baltimore, May 28, 1904,
Mr. F. W. Wood, president of the Maryland Steel Company, testified
that once, bidding against a north of England firm for some cargo
steamships, he came within 15 per cent of the English figures—but
this, as indeed Mr. Wood said, was also exceptional. He placed the
average difference in cost between American and British ships under
present conditions at from 30 to 50 per cent.
AS TO COST OF MATERIAL.

In this connection there arises a factor in the present cost of American
 ships which the Commission has no desire to overlook. It calls for
some plain speaking. The tarift laws of the United States now, as for
more than a decade past, allow the free importation of all materials
to be used in building or repairing an American ship for the foreign
trade or building for foreign ownership. This authority is found in
sections 12 and 13 of the free list of the Dingley law, as follows:

Spe. 12. That all materials of foreign production which may be necessary for the
construction of vessels built in the United States for foreign account and ownership,
or for the purpose of being employed in the foreign trade, including the trade between
the Atlantic and Pacific ports of the United States, and all such materials necessary
for the building of their machinery, and all articles necessary for their outfit and
equipment, may be imported in bond under such regulations as the Secretary of the
Treasury may prescribe; and upon proof that such materials have been used for such
purposes no duties shall be paid thereon. But vessels receiving the benefit of this
section shall not be allowed to engage in the coastwise trade of the United States
more than two months in any one year except upon the payment to the United States
of the duties of which a rebate is herein allowed: Provided, That vessels built in
the United States for foreign account and ownership shall not be allowed to engage
in the coastwise trade of the United States.
Sic. 18. That all articles of foreign production needed for the repair of American
vessels engaged in foreign trade, including the trade between the Atlantic and Pacific
ports of the United States, may be withdrawn from bonded warehouses free of duty,
ander such regulations as the Secretary of the Treasury may prescribe.