REPORT OF AMERICAN MERCHANT MARINE COMMISSION. 9

The scope of these provisions is very broad—all materials for the
construction of the hull and machinery, and, besides, all necessary articles
 of equipment. Dut vessels thus constructed can not engage in
the coastwise trade for more than two months in any one year,
except the long-voyage trade between the Atlantic and Pacific seaboards.
 No American shipowner under present conditions builds a
deep-sea ship, even though she be designed primarily for foreign commerce,
 without considering that he may be glad some day to fall back
on the coastwise trade, now extended to Hawaii and Porto Rico and
soon to include the Philippines. Therefore this apparently liberal
privilege of free materials has not checked the decline of American
ocean shipbuilding, and has been availed of for the complete construetion
 of only one large steel ship, the Jirigo, built by Arthur Sewall
& Co., at Bath, Me.
The Messrs. Sewall say that the peculiar status of the Dirigo is the
cause of frequent anxiety to them, for if the vessel were to he for
more than two months on the voyage from Puget Sound to Hawaii,
the duties would have to be paid on the foreign plates, angles, and
beams, of which she is constructed. Small amounts of foreign steel
are occasionally imported for ship use, but the whole quantity is
inconsiderable, and though the Sewall yard has built several steel
ships since the [erigo. it has never again invoked the free-list privilege.

AN INJUSTICE TO OUR BUILDERS.

American ships continue to be constructed of domestic steel, even
when designed for foreign service. This fact lends large importance
to certain testimony which appeared most explicitly in the hearing of
June 28, 1904, at Cleveland, though the fact had been alluded to elsewhere.
 Mr. James C. Wallace, then Fea ander, now president,
of the American Shipbuilding Company, said:
Recently one of our largest steel mills sold abroad 100,000 tons of steel plate. They
delivered it, T understand, at Belfast, at $24 aton. That would practically mean, with
ocean rates ag they are, $22 a ton at tide water. They are charging us to-day, at
Pittsburg, $32 a ton. A differential of $10 in a ship carrying 5.000 tons is $50,000.
That is the shipbuilder’s profit.
And again in reply to questions:
Representative Grosvenor. I want to know who bought the steel you speak of?
Mr. Wartace. The Harland & Wolff Company, Belfast.
Representative Grosvenor. From whom did they buy it?
Mr. Warnace. The United States Steel Corporation. i
Representative Grosvenor. Do you know where it was shipped from?
Mr. Warnace. Ido not. I presume from the Carnegie Steel Company. I do not
know that, though, for a fact, as they have go many mills.
Representative Grosvenor. And their present price to you is $32?
Mr. Warnrack. Thirty-two dollars a ton, Pittsburg.
Representative Grosvenor. And that was laid down at Belfast at $227?
Mr. Warrace. Twenty-four dollars.

Whatever may be said for the occasional sale abroad of surplus
manufactures below the domestic price, this, manifestly, is a case for
which the familiar defense is quite impossible. American shipbuilding
 is terribly depressed; it is essentially an unprotected industry in
the foreign trade, and when American steel mills, long and amply
protected. sell material to foreign shipyards at eight or ten dollars