BUREAU OF NAVIGATION, Washington, D. C., November, 1884.

SIR: In compliance with the act of Congress entitled "An act to constitute a Bureau of Navigation in the Treasury Department," which provides that the Commissioner of Navigation "shall investigate the operations of the laws relative to navigation, and annually report to the Secretary of the Treasury such particulars as may, in his judgment, admit of improvement or require amendment," I have the honor to submit the following report.

The bill authorizing the institution of the Bureau of Navigation was adopted July 5, 1884, and during the same month the organization of the office was begun and completed without any difficulty or delay by the transfer of the greater part of its force from the Secretary's office, the Register's office, and the Bureau of Statistics, in which three offices the general work had theretofore been performed.

Several clerks necessary for the performance of the special work caused by the management of the shipping officers and care of the seamen (which was assigned to this Bureau) were detailed from other offices of the Treasury Department, who, together, comprise the personnel of the Bureau of Navigation. Credit is due the clerical force for its valuable aid in organizing the office, which has been satisfactorily performed.

The recent shipping act which went into operation at nearly the same date with the organization of this Bureau has not yet been in force a sufficient time to show the effect upon shipping that may be expected to result from its various measures of relief.

An unfortunate period of depression in the shipping business of the world, brought on, to a great extent, by overproduction in the yards of Great Britain, will probably tend to delay still further the expected benefit.

HISTORICAL RETROSPECT.

Descended principally from the English, it was natural that the early settlers of this country should bring with them some of the maritime spirit of their ancestors.

The ancient policy of Great Britain seems, in general, to have afforded little or no protection to shipping by means of exclusive privileges. The first trace we see of what subsequently grew into the protective

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navigation laws of England is in the reign of Henry VII, who, from his desire to make the kingdom powerful on the sea as upon the land, adopted an act in 1485 prohibiting the importation of certain wines except in English vessels. This was the commencement of a series of legislative enactments inspired by jealousy of the Dutch which matured into the famous navigation act passed by the Long Parliament in 1651. This great prohibitive measure provided in general terms that no merchandise from Africa or America should be imported into England in any but English built ships, navigated by an English commander, and manned by a crew of which at least three fourths should be English; and also that certain enumerated articles of merchandise from the ports of Europe should not be imported in foreign ships except such as were imported direct from the country of their growth or manufacture in vessels belonging to that country.

In addition to these restrictive measures an imposition of discriminating duties was laid on all goods imported in foreign vessels from Europe. The Dutch had at that time nearly monopolized the carrying trade of Europe, and it was against their shipping that these prohibitory statutes were leveled, and fell with a heavy hand; so that the spirit of maritime enterprise seemed after awhile to pass from that industrious people to the English. The course of England at this time has been criticised as harsh and illiberal, but it must be remembered that the nations of the world had not at that early period become acquainted with modern notions of international brotherhood or comity, and the situation was so urgent as to demand extreme measures in self defense. The situation of England at that time as compared with her rivals was not unlike that of the United States to-day. She had a few ships, but the Dutch had enough more to engross the trade. England had greater resources, but they were undeveloped. The Dutch could sail their ships cheaper, and without some such measure they would have kept on doing the carrying trade of England, perhaps, until now. But the navigation laws of Cromwell put a sudden stop to the trade of the Dutch, and although their Great Admiral hoisted a broom to his masthead and attempted to sweep the seas, it was too late; the power of England on the sea was growing too fast. England maintained a rigorous monopoly of the trade of the world in turn, and her tonnage under the new navigation laws, which were continued with but few modifica tions for nearly one hundred and fifty years, increased from less than two hundred thousand to about two millions.

It was under the rule of this act that England did most of her colonizing in America. Under this restrictive policy the American colonies were founded and grew up into independence, becoming subsequently the most formidable rival of the mother country on the ocean. But before the Revolution the restrictive maritime policy came to be a great ground of complaint by the colonies, and, according to some, helped to precipitate the war.

Mr. Huskisson, one of the first advocates of a repeal of the prohibitory policy in England, in a speech in Parliament, once referred to the navigation laws as being one of the chief influences that brought on the war for independence. He said:

This is a sample of the real grievances under which our American colonies labored. Such a state of law could not fail to engender great dissatisfaction and much heart-burning. It is generally believed that the attempt to tax our American colonies without their consent was the sole cause of their separation from the mother country. But if the whole history of the period between the year 1763 and the year 1773 be attentively examined it will, I think, be abundantly evident that, however the attempt at taxation may have contributed some what to hasten the explosion, the train had been

long laid in the severe and exasperating efforts of this country to enforce, with inop portune and increasing rigor, the strictest and most annoying regulations of our colonial and navigation code. Every petty adventure in which the colonists embarked was viewed by the merchants of this country and the board of trade of that day as an encroachment on the commercial monopoly of Great Britain. The professional subtlety of lawyers and the practical ingenuity of custom-house officers were constantly at work in ministering to the jealous but mistaken views of our seaports. Blind to the consequences elsewhere, they persevered in their attempts to put down the spirit of commercial enterprise in the people of New England until these attempts roused a very different spirit-that spirit which ventured to look for political independence from the issue of a successful rebellion.

The result is well known. The country found itself engaged in a civil war. That war in its progress involved us in the greatest difficulty and embarrassment. It was terminated by submitting to humiliations such as, I trust to God, the Crown of Great Britain will never again be exposed to.

If the proceedings of the Government of this country, after the peace of 1763, be closely examined we shall find that many of the causes which, ten years afterwards, led to the unfortunate rupture with our then colonies, now the United States of America, may be traced to our unreasonable attempts to enforce, in their most rigid and exclusive application, our colonial and navigation system. Every complaint, every petition, every remonstrance against the oppressive tendency and vexatious consequences of that system, on part of the inhabitants of New England-every temperate effort made by them to obtain some slight relaxation of the trammels that shackled their disposition to engage in commercial enterprise were only met on the part of the British Government by a constant succession of new laws, enforcing still more restrictive regulations, framed in a spirit of still more vexatious interference. One instance of the character of that legislation will be sufficient, and I give it as a specimen of the commercial jealousy which prevailed in our councils in reference both to the colonies and to Ireland.

A ship from our American possessions, laden with their produce, was stranded on the coast of Ireland. It will naturally be supposed that the cargo was landed and the ship repaired in that country. No such thing. The law compelled the owners to send another English ship from England for the purpose of bringing away the cargoa cargo which, not improbably, might then be wanted in the Irish market, and which was, perhaps, destined to be ultimately consumed there, after having been transshipped in a port of that country, landed in an English port, and again reshipped to Ireland.

After the acknowledgment of the United States as an independent nation, and the foundation of our Government in 1789, it was natural that a spirit of retaliation should prevail in the framing of the navigation laws of the young republic. These laws were enacted in 1790 and 1792, being based on the established system of the mother country. Acts levying tonnage dues and import taxes, discriminating to such an extent in favor of American shipping as to give them a monopoly of the foreign carrying trade, were adopted.

A law of 1790 enacted that a tonnage duty of 30 cents be levied on American shipping, and of 50 cents on all foreign vessels whose countries were not in alliance with the United States. A remission of 10 per cent. of the tariff on goods imported was also allowed when imported in American bottoms.

The maritime enterprise of the American colonies became quite prominent before the war of the Revolution. Finding themselves in a country whose dense forests afforded excellent timber, while it barred the progress of the pioneer on his westward march, the inhabitants naturally turned to the sea, which became the field of their early exploits. New England, with her forests of ship-timber, and coast-line indented with numerous harbors and intersected with navigable rivers, claims the honor of being the birthplace and early home of ship-building on this continent. If we may credit the legends of the earlier settlers, a vessel called the Virginia was built by the Popham colonists near the entrance of the Kennebec River, in Maine, in 1607, thirteen years prior to the landing of the Pilgrims. The Virginia was the first vessel constructed in the territory now known as the United States. She was

only 30 tons burden, and yet it was said she crossed the Atlantic Ocean on two successful voyages.

It was more than twenty years after this that the first keel was laid in Massachusetts Bay; this was at Medford, on the river Mystic. And twelve years later the first large vessel (300 tons) was launched at Salem.

Manhattan Island (now New York), with its magnificent harbor at the entrance of a great river, was also early in the race with her first vessel, called the "Onrust" or "Restless," believed to have been built by one of the Dutch settlers, named Block, in 1614. When New York City was incorporated in 1686, she had ten vessels of over 100 tons, and about two hundred vessels of 50 tons each. A considerable share of American tonnage before the war of the Revolution was owned by merchants in England.

During this period, and up to the close of the Continental wars of Europe in 1815, the merchant vessels of England and France were in constant danger of capture, giving to our flag an advantage which was sought by foreign shippers, so that our vessels became in our infancy the common carriers for the belligerent nations of the world.

The fishing business, which was commenced early, soon employed a considerable fleet of craft, called "pinkies." The bulk of this enterprise early centered about Cape Ann, Massachusetts, near Gloucester, which locality still possesses the largest deep-sea fishing trade.

The credit is claimed by this country of having built the first vessel to cross the Atlantic under steam. This vessel, called the "Savannah," was built in New York in 1818, and made the voyage the following year from the port of Savannah, Ga., to Liverpool.

The cost of vessels built at that early period, mostly of material that was produced in the woods near the coasts, was low compared with the ruling prices of the present time. From £3 5s. to £4 15s. per ton burden for the hull is said to have been the average, but the rigging and sails had to be imported. The price of the vessel when ready for sea was nearly double the cost of the hull. In England, where timber for ship-building was all the time becoming more expensive, the cost of a ship at that time, complete and ready for sea, is said by Lindsay and other authorities to have been £10 to £12 per ton, and of the cheaper Canada-built vessel, which began to be used soon after, £7 to £8 per ton. Such were the favorable conditions in which our ancestors began the contest for the carrying trade of the ocean, aud such the beginning of what subsequently became one of the finest fleets of merchantmen afloat. Encouraged by the prohibitory policy that was early adopted in this country, the inhabitants of our seaboard were soon enabled to do a large commerce. Great Britain was for a long time embroiled in continental wars, much to the injury of her ships, and began to feel herself gradually checkmated on the ocean by the increasing merchant navy of the States, so that she was finally glad to relax her protective policy. This was first done in 1815, under the sanction of the British Parliament, by the treaty negotiated that year between the two countries.

By this treaty the ships of the two countries were placed reciprocally upon the same footing in the ports of England and the United States, and all discriminating duties chargeable upon the goods which they conveyed were mutually repealed. It adds greatly to the value of this concession that it was made by no disciple of free-trade doctrines, but was forced, by the very consequences of the system itself, from a Government strenuously opposed to all change in the direction of relaxation. (Progress of the Nation, sec. 3, chap. 9.)

This treaty was the opening wedge for further relaxation, mitigating to a large extent the restrictive measures of the British navigation sys

tem. The discriminations of England, which were submitted to up to this time, were not borne longer by other commercial nations. In 1823 Prussia notified the British Government that until an alteration of their restrictive system was made in favor of Prussian ships, similar heavy duties would be laid upon British shipping in Prussian ports. It was obvious that a corresponding movement would be made in other countries, when, in 1824, Mr. Huskisson carried through Parliament the celebrated reciprocity acts.

These statutes authorized the crown to permit the importation and exportation of merchandise in foreign vessels at the same duties as were chargeable when imported in British vessels, in favor of all such countries as should not levy discriminating duties upon merchandise carried into their ports in British vessels; also to levy upon the vessels of such countries, when frequenting our ports, the same tonnage rates as are chargeable upon our own vessels. At the same time the crown was empowered to impose additional duties upon goods and shipping against any countries which should levy higher duties in the case of the em ployment of British vessels in the trade with these countries. Under these acts reciprocity treaties were concluded in 1824 with Prussia, Hanover, Denmark, and Oldenburg; in 1825, with Mecklenburg, Bremen, Hamburg, Lubec, States of La Plata, and Columbia; in 1826, with France, Sweden and Norway, and Mexico; in 1827, with Brazil; in 1829, with Austria; in 1834, with Venezuela; in 1837, with Greece, Holland, and Bolivia.

Notwithstanding the removal of prohibitory measures the tonnage of Great Britain did not increase comparably with that of the United States for a number of years after the passage of the reciprocity act. From 1815 to 1842 the shipping of that country increased only 40 per cent., while that of the United States increased nearly 70 per cent.

This was probably owing to the continually enhancing cost of materials for the construction of wooden vessels in England, while in this country the supply was unlimited. Ship-timber was becoming scarce and dear in England and had to be transported from America and the north of Europe. A celebrated economist,* writing in 1840 on the commercial situation, in speaking of the enhanced price of ship-timber in England and difficulties to be encountered in competing with the cheaper vessels of Prussia and Denmark, says:

If, however, there be any real ground for believing that ships in the north of Europe may be built cheaper than in England, the remedy is not to be sought for in a revival of the prohibitive system. Whatever advantage the Prussian and Danish ship-owners at present enjoy as compared with ours is not owing to their peculiar skill or sagacity, but to our unexampled folly; to our loading the superior timber of the north of Europe with a discriminating duty of 458. a load in order to force the consumption of the dearer and comparatively worthless timber of Canada! We speak advisedly and from the best attainable information when we express our conviction that a reduction of the duties on Baltic timber to the level of those charged on timber from Canada would secure for us a new and important branch of industry-the building of ships for exportation.

While England was having difficulties on account of the great scarcity of ship-timber, the United States had plenty, and with the improved machinery for preparing lumber could furnish vessels cheaper. The character of our ships was improving, as well as the models. The famous Baltimore clippers came into use for a certain trade, and were followed by the still more famous clipper ships for the new trade that had opened between New York and our Pacific ports. A period of high freights

* J. R. McCulloch, esq.