or are they, on the whole, in line with recent and present economic tendencies? Will the pre-war conditions with reference to the world's merchant marine be gradually restored or will the new situation develop in accordance with the transformation which has taken place since the outbreak of hostilities in 1914?

To answer these questions it will be necessary to treat at some length the shipping situation of the world as affected by the war and then discuss that situation in the light of industrial and commercial tendencies and conditions.

The Shipping Situation

The shipping situation and the changes brought about by the war may be indicated by: (1) a tabulation of the number and tonnages of the vessels comprising the national mercantile marines of the leading commercial nations of the world in June, 1919; (2) a comparison of these tonnages with those of June, 1914; (3) a gauging of the gains and losses in the light of what would probably have been their growth had war not intervened; (4) a consideration of vessel depreciation and of the effects of changes in shipping routes during the war period; and (5) a discussion of the position of the merchant shipping of the United States.

1. The vessels included in the tabulation for June, 1919, are those of 100 gross tons2 and over, and embrace all such vessels launched and operating in every part of the world except those trading in the Caspian Sea, wooden ships operating on the Great Lakes of North America, and Japanese sailing vessels, none of which are recorded in Lloyd's Register.

2. In June, 1919, the world's mercantile marine, as recorded in Lloyd's Register, consisted of 29,255 vessels with an aggregate

2 The gross ton and net ton, as applied to shipping, are space measurements. Gross tonnage represents the space within the hull and enclosed superstructures of a vessel measured in units of 100 cu. ft. Net tonnage is the same space using the same unit minus the space occupied by engines, boilers, crew quarters, etc., which are not available for traffic.

3 Lloyd's Register records its vessels as soon as launched. The Bureau of Navigation does not document a vessel until it is ready for merchant traffic. Owing to the comparatively large number of vessels in the United States which have been launched but not documented and the former German tonnage which now flies the American flag but is not yet engaged in mercantile shipping the figures of Lloyd for American shipping in June, 1919, are larger than those of the Commissioner of Navigation. See Annual Report for 1919, pages 8 and 11.

TABLE 1.1-NUMBER AND GROSS TONNAGE 2 OF VESSELS, 100 TONS GROSS AND OVER, JUNE, 1919.

1 Based upon table 1, page 960 of vol. 2, of Lloyd's Register of Shipping, 1919-20.

2 In earlier editions of Lloyd's Register gross tonnage of steamers only was given. Sailing vessels were measured in net tons. In computing total tonnages of both kinds of vessels the gross tonnage of steamers and net tonnage of sailing ships were added together. In the current edition sailing vessels are given in gross tonnage.

8 Wooden vessels not included.

4 Japanese sailing vessels not recorded.

gross tonnage of 50,919,273. Sailing vessels constituted about one sixth of the total number, but less than one sixteenth of the aggregate tonnage. In June, 1914, the world's shipping comprised 30,836 vessels with a combined tonnage, gross and net,* of 49,089,552. Of these totals 24,444 were steamers with an aggregate gross tonnage of 45,403,877, and 6,392 were sailing ships with a total of 3,685,675 net tons. As the net tonnage of sailing

5

4 Gross tonnage of steamers and net tonnage of sailing vessels.

5 Lloyd's Register of Shipping, 1914-15, volume 2, tables I and II, pages 960-961.

vessels in 1914 was approximately equivalent to 4,050,000 gross tons, the world's mercantile marine operated by steam or motor power increased during our five-year period approximately 2,500,000 gross tons, while that of sailing vessels declined over 1,000,000 gross tons."

The redistribution of vessel tonnage during the period named is one of the most significant effects of the world war and can be well indicated by tabulating in round numbers the steam tonnages of the leading commercial nations of the world for June, 1914, and June, 1919, and noting the gains and losses of each, as follows:

TABLE 2.-STEAM TONNAGE, JUNE, 1914, AND JUNE, 1919, (EMBRACING STEAMERS OF 100 GROSS TONS AND OVER).

1 Steamers documented in the Philippine Islands are here included among those in "other countries" although properly American. See table 1 above, and Lloyd's Register for 1914-1915, vol. II, p. 960.

One of the most striking features of a comparison of the 1914 and 1919 figures is the relative position of the United Kingdom

• In the Annual Report of the Commissioner of Navigation for the Fiscal Year ended June 30, 1919, the sail tonnage for June, 1919, is treated as net rather than gross tonnage making the loss for the five-year period 664,000 net tons instead of over 1,000,000 gross tons (p. 11). See, however, volume 2, pages 960, of Lloyd's Register for 1919 and 1920, and compare with corresponding tables of earlier editions.

and the United States. In 1914, 41.6 per cent of the world's steam tonnage was registered in the United Kingdom, and 9.4 per cent in the United States, of which only about 4.5 per cent was sea-going. The present figures are United Kingdom 34.1 per cent and the United States 24.9 per cent, of which 20.4 per cent is sea-going tonnage. From June, 1914, to June, 1919, the shipping of the United Kingdom operated by steam or motor power had declined 2,547,000 gross tons, or 13.5 per cent, while that of the United States had increased 7,646,000 gross tons, or 178.3 per cent. The increase for sea-going craft was 7,746,000 gross tons, or 382.1 per cent.

8

Next to the United Kingdom, Germany suffered the heaviest loss measured in tons, and its relative loss was greater than that of the island kingdom. In the decade prior to the war, Germany's mercantile marine was increasing rapidly, having added to its steam tonnage between 1900 and 1914 about 2,800,000 gross tons. This addition, while less than half that of the United Kingdom for the same period, represented a much greater proportional growth. Notwithstanding this relatively rapid development in the fourteen years antedating the war, the German steam tonnage in June, 1914, amounted to only 5,135,000 gross tons, and the decline of 1,888,000 gross tons during our five-year perioda loss which is likely to be increased rather than diminished in the immediate future-indicates a serious setback for one of the largest and most rapidly growing mercantile fleets of the pre-war period.9

Japan, which in 1914 occupied sixth place among the nations in mercantile tonnage, now ranks fourth, having exchanged places with Norway. Next to the United States, Japan emerged from

7 Not all of this tonnage is registered for foreign trade. In June, 1919, according to figures published by the Bureau of Navigation, Department of Commerce, the registered tonnage-i.e., the tonnage engaged in foreign tradeamounted to 6,669,726 gross tons, the bulk of which was steam. In the United States the tonnage engaged in domestic trade is known as enrolled or licensed rather than registered. See Annual Report of the Commissioner of Navigation for 1919, page 8.

8 Bureau of Foreign and Domestic Commerce, Miscellaneous Series No. 96, 1919, p. 107.

The steam tonnage of the United Kingdom in 1900 in round numbers was 12,000,000 and that of Germany about 2,300,000. The addition of 6,900,000 gross tons to the steam mercantile fleet of the former country means about 58 per cent increase, while the addition of 2,800,000 gross tons to the German merchant marine represented a growth of 120 per cent.

the war with the largest absolute and relative increase in its shipping of any country in the world. This increase is small compared with that of the United States, but amid the smaller gains and heavy losses of most other commercial nations the growth is noteworthy. Japan was in a position to profit by the urgent demand for shipping on the Pacific after the outbreak of hostilities in 191410 and the internment and withdrawal from trade for war purposes of a large part of the mercantile marine of the belligerent countries-particularly vessels engaged in commerce in the Orient and on the Pacific.1

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3. The world's shipping in the years immediately preceding the war was growing rapidly, due partly to trade development, and partly to a spirit of rivalry among the leading commercial countries to have a mercantile marine consonant with their supposed commercial and political importance. This growth was seriously affected by the war, and must be taken account of in any attempt to describe the shipping situation as it was shaped by the crisis through which the world has just passed. Several attempts, particularly in England, have been made to gauge war losses and gains on the basis of an assumed normal growth. Diagrams illustrating the net losses and gains to the mercantile marines of the world have been drawn and published showing more vividly than bare figures the changes wrought during the years of the great struggle.1

12

Estimates of this character always contain elements of uncertainty; and as applied to pre-war shipping conditions when some of the largest line companies were either in the hands of receivers or near the verge of bankruptcy, they have to be made with a 10 See "The War and Trans-Pacific Shipping," in AMERICAN ECONOMIC REVIEW, Vol. 7 (Sept., 1917), p. 553.

13

11 Some interesting examples of the curtailment of the Oriental services on the part of British line companies are given in Miscel. Series No. 96, pp.

105-113.

12 See Annual Report of the Chamber of Shipping of the United Kingdom for 1918-19.

13 The International Mercantile Marine defaulted in the payment of interest on its 42 per cent bonds on October 1, 1914, following a long period of depression. On February 1, 1915, it defaulted in the payment of interest due on the International Navigation Company 5 per cent bonds. The progress of the war, however, brought this combination a prosperity not hitherto enjoyed. The International Mercantile Marine controls the companies operating the American Line, the Red Star Line, White Star Line, Atlantic Transport Line, Dominion Line, and Leyland Line.