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Memoirs of Robert Dollar
Vol. 2 - Chapter One


WHILE making a trip on board the steamship Wenatchcc from Seattle to Shanghai during month of April, 1921, I resumed the writing of my memoirs which I had discontinued with the close of the year 1916. I commenced the year 1917 by presenting to the San Francisco T'heological Seminary, of San Anselmo; California, a check for $50,000 to endow the Chair of New Testament Interpretation, of which Dr. E. Wisher was the professor. The endowment has been named "The Robert Dollar Chair."

In looking over my diary, I find the following entry on the first of January: "I commence the year in humble and perfect trust in God's guidance in all that is before me during all of this year."

Getting together a number of San Franciscans that were interested in the trade of China, we formed what was called "The China Commercial Club," at the first meeting of which there were forty prominent merchants present. The object of the club was to increase and further develop the trade between China and the United States, particularly the Pacific Coast. It turned out to be successful in after years, and increased not only the trade, but the friendship between the two countries, as many distinguished men were entertained.

For many years I have been a director of the Seaboard National Bank and lately of the Anglo & London Paris National Bank, both of San Francisco; but as it is illegal to serve on the directorates of two national banks, by mutual arrangement with the presidents, I resigned from the Seaboard and my son Stanley was elected to succeed me.

In January 1917 I addressed a meeting of bankers at Oakland on the subject, "Foreign Trade a Necessity to United States Prosperity."

A great deal of my time was taken up attending meetings, I at that time being president of many companies, Shipowners' Association, Y. M. C. A., Theological Seminary, Merchants' Exchange, Douglas Fir Club, and others.

It was during this month that 130 San Franciscans interested in increasing our trans-oceanic trade, left on a special train to attend the Fourth Annual Meeting of the Foreign Trade Convention at Pittsburg, Pa. On the 26th of January, I delivered the following address, which was received with tremendous applause.

ADDRESS BEFORE FOREIGN TRADE CONVENTION

Mr. Chairman and Gentlemen: What I am going to talk about are the conditions that existed previous to the war, what they will be after the war, and present conditions. I have often said, anybody can run a ship today and make lots of money, but I am going to take you ahead to the time when we will have to get down to the keenest competition the world has ever seen.

I want to say to you that in foreign shipping' we are in competition with the whole world, and we must meet the keenest and sharpest men the world produces in this competition. It is certainly a man's job.

In a talk at New Orleans I did not speak of the handicaps against American ships, but later, some of the members, especially those from the Middle West, said they wished I had mentioned them. I did not have the time to discuss the subject. owing to the vast number of handicaps authorized by the Government.

Take, for instance, the method of measuring an American ship. The American Government measures a ship larger than any other nation. The result is, when its ships go to a foreign country, from 20% to 30% more tolls are paid to the foreign Government than the shipping of any other nationality. That amounts, in a ship of 8000 tons deadweight measurement, to about $5500 a year

The extra cost of inspection: An American has to lay a vessel up to be inspected. In a foreign country, the inspector will say he wants to inspect your vessel, and asks if you are ready and what you have ready. The inspector is told what is ready, and, after 'iispectiug, a certificate of inspection for that certain part is issued, and the ship proceeds to the next port, where the inspection is finished. This method of inspection insures a minimum of delay. But, instead of trying to work with the shipowner, our Government says,^Stop work and wait until we can inspect your ship."

I had a ship in Honolulu at one time on which the inspection certificate had expired. She was held up. The nearest inspector was in San Francisco (there was none at Honolulu). After telegraphing a number of times to Washington, we finally got the consent of the authorities to send an inspector to Honolulu. In the meantime our ship and crew were waiting there for the inspector to come (laughter) at a cost to us of about $30,000 a year.

Then in the difference of wages: I have the records in my books of the wage cost of operating three ships; one an American ship, one a British ship and the other a Japanese ship. The Japanese ship we chartered, but the other two T owned. The wages on the American ship were $39,240 a year; the wages on the British ship were $15,696 a year; and the wages on the Japanese ship were $9324 a year. When we get right down to keen competition, this is the kind of competition we are going to meet along with all the other handicaps we have. I won't mention them now as it would take too long.

Mr. Furuseth of the Seamen's Union, in planning the Seamen's Bill which has since been enacted as a law, said his plan was to get every sailor that came to an American port on a foreign ship to desert from his ship, and then re-engage him at American -wages. In theory that was fine, hut in practice it wasn't worth a cent. (Laughter.) He forgot that, according to Japanese law, if a sailor deserts from a Japanese ship in a foreign port, when he returns home he is put into jail for a year. Now, Mr. Furuseth made provisions hi the Seamen's Bill, that the sailors of every nationality who deserted their ships in the United States would return on their own ships, or they would be taken in charge by our immigration authorities and deported. lie did not take into consideration that the Japanese would go back home and then straight into the calaboose on arrival. (Laughter.)

Now, what I have to say is this: Shipowners don't want a subsidy; because a subsidy, you know, is to Congress like showing a red flag to a bull; but, if other nations are paying their sailors $20 a month and the American wage is $50 a month, and the Government wishes to keep this scale of wage, then let the Government pay to every American sailor shipped, the extra $30 a month. That will not be a subsidy, that wife only be a little help to the poor men. (Laughter and applause.)

For the benefit of you men who are not in the shipping business, I will say: When you hire a man, the bargain is just between you and him; you lure him and lie works for you. Not so in shipping. When we hire a crew for a ship we have to take them before the United States Shipping Commissioner who explains to the men the agreement and each man signs the shipping articles. Then, when it comes to paying off, we are not permitted to pay each man, but we must take the money and give it to the Shipping Commissioner and the Shipping Commissioner pays him. You see, gentlemen, that the Government comes in between to keep the wicked shipowner from "doing up"' the poor man. (Laughter.)

Now, a question that you gentlemen no doubt have often asked yourselves, is this; "What difference does it make to us whether we ship our goods in a foreign or American ship, provided the rate of freight is the same." It shouldn't make any difference. But I will tell you where the difference comes in. Take a shipowner running a ship from an American port; he is the best drummer of trade you can get. because, as I have explained to you, he will go to extremes to obtain a return cargo for his own port, and try to increase the commerce of that port. But, if I were living in London or in Liverpool, do you think I would be pulling for this United States? Not at all. It is because I live in this country that I am a drummer for the trade of this country and I try to keep my ships going. As an illustration, I cited a case where we sent a ship clear around the world to get back to our own country. That is the advantage of having ships of our own.

Another thing. If a ship is to come back in ballast, you gentlemen are going to play iust about double for the freight going outward. A return cargo will almost cut your freight bill in two.

The Emergency Act was about the only thing that was passed by Congress that amounted to anything at all in the way of helping American shipping, and that- was drafted by a committee of this organization. But the ink had hardly gotten dry on the President's signature, when down came the LaFollette Bill, which practically crushed us out of existence. I have not time to go into the details of that Bill, as it would take a half hour to tell you about it, and you would be tickled to death with the explanation, if I only had the time to give it. (Laughter.) That was by way of helping the American Merchant Marine—over the left.

Now, I am going to read these figures of the Department of Commerce report of last May,—just try and keep them in your mind.

Before the war the American tonnage from the Pacific Coast was 26.10% of the whole tonnage. In May, 1916, after the beneficial LaFollette Bill had gotten ri its deadly work, the American tonnage from the Pacific Coast was 1.97%. Shall I read those figures over? Before the war, 26.10%, and after, 1.97%, after—you know what. (Laughter.)

Then, the British tonnage before the war was 29.38%, and now, in May, it was 37.09%.

The German tonnage was 18.47%, which of course was wiped out.

Then, Japan. I want you to take particular notice of this, gentlemen, and take it home with you, if you will. Just make a note of it: Japan, before the war, did 26.05% of the Pacific trade, and in May, 1916, 50.90%. That is the effect of the LaFollette Seamen's Kill. You will notice the Americans went down to 1.97% and the Japanese ran up to 50.90%; and, if I had the statistics up to the first of January, it would show an increase for the Japanese up to and over 60%. They would not show any decrease for the Americans, because we were right down to nothing. (Laughter.)

Then the Dutch came in. Before the war they did nothing at all, but since the war they are doing 10%.

Those figures are very significant taken mi connection with the legislation that is going on.

1 want to say to you gentlemen that I am not making a political speech. The Republicans did their worst to hurt the American Merchant Marine, and the Democrats were only more successful because they were better at figuring—they were able to do us up worse than the others. (Laughter and applause. ) You see there is no discussion of politics in this.

Now I will give you just one more illustration. The old Pacific. Mail Steamship Company paid no dividends for thirteen years. How would you like it? (Laughter.) Thirteen years between drinks. Think of it. Then the Seamen's Act became effective, and if the company had remained in business it would have had to pay $600,000 more a year.

The Seamen's Act provides that a sailor can demand and receive half the wages due him. at any port at which the ship arrives. Some of you don't know what sailors do when they get their money, but I do.

When a ship of the new Pacific Mail Steamship Company arrived at Honolulu, the crew asked for and received half their wages, and all hands went up town. I don't know what they did up town, but they forgot to come back. When the captain was ready to start, the crew were not ready, so the ship remained there a day waiting for the crew, and then proceeded to Yokohama. There the same thing was repeated, only they brought whiskey aboard the ship. While in Yokohama the company gave a banquet to a number of Japanese gentlemen aboard the new ship after it had been inspected by the guests, when the waiters got into a free-for-all tight right in the dining saloon amidst the guests, and broke furniture as well as each other's heads; then again at Kobe the dose was repeated. The company decided it could stand it no longer, so sent to China for a Chinese crew. The American crew were sent home as passengers, and the company continues running its ships with Chinese crews. Do you blame it?

The Japanese, I will just say, are increasing their trade to South America. Their trade to South America during the past year has increased about 50%.

There is one thing more I wish to say, that is: With these abnormally high freight rates where shipowners are making money as never before, the Americans are out of it, and the other nations are m it. Japan has increased her wealth so much,—her balance of trade was just about even- but shipping has increased her wealth to such an extent, that every steamer leaving San Francisco, practically has from one million to two millions of gold—-the balance of trade now being very much in her favor,—the result of Americans not having a merchant marine. Gentlemen, I thank you.

Those meetings were very successful and are gradually getting the people to appreciate the necessity and importance of foreign trade. Credit for their success was due largely to the leadership of James A. Farrell and other brainy men who gave their time and influence to the Foreign Trade Council meetings. I visited Washington and called on various members of the Government, and had conferences with the new Shipping Board, who were trying to devise ways and means of properly conducting this great undertaking. But as time went on the situation became more and more complicated and difficult to manage; until at the present writing it has reached a deplorable state, there not having been a fully authorized board in many months. There are now only two members on the board, neither of whom have authority to do anything constructive, consequently business has come to a standstill.

The situation has become so acute and difficult that the present administration has been unable to obtain the right kind of men to accept appointments to the Board.

The Act governing the personnel provides that no one interested in shipping is eligible, the inference being that all shipowners are men who could not be trusted—a sad and unjust slur on the shipowners of the United States. Compare this policy' w'.th that of Great Britain, where the biggest shipowners are the active members of the Shipping Board, hence the great success under their management. Also compare this British policy with the latest Wilson appointments, where the majority are lawyers and newspaper men, all honorable and good men. but utterly incapable of managing the biggest merchant fleet in the world. It requires men of lifelong experience in maritime affairs and shipping to successfully handle our merchant fleet and this knowledge can only be had by the hard knocks of personal experience and application.

The holding of ships at a price more than four times the price of similar ships that other nations are willing to accept, only goes to show that our Shipping Board >s completely out of touch with the actual and true situation. Shipping Boards have to do business throughout the world, and must meet the competition of every nation, therefore, they must meet their rates not only in the selling of ships, but also the rates of freight that all others nations are willing to accept. Competition has gotten almost to the point of a survival of the fittest, as there are afloat throughout the world over twelve million tons of shipping more than existed before the war in 1914, the chief cause for such great numbers of ships being laid up today.

The Shipping Board reports over half of its fieet laid up, and present conditions would indicate that it will be many a day before all the idle ships are employed. Besides all this, there are over six million tons of ships building that w ill be in commission before the end of this year. Tank steamers were scarce; but, there are so many now under construction that it is a certainty many of them will be forced to lay up with the freighters for lack of profitable business.

The situation in regard to passenger steamers is different; many of them were lost during the war, and very few were built as compared with ordinary freighters, so that there is room for a few fast passenger steamers; but even in this class of vessel the shortage is rapidly being made up, so that by the end of this year I think there will be as many in commission as will be required. One thing is sure as far as the Pacific Ocean trade is concerned, by the end of 1922 there will be more passenger steamers in commission than there will be business for them. So taking the ship owning situation as a whole, it is going to be a survival of the fittest, which will be determined by:

First. Those having the most modern ships;

Second. The best organization to secure world freight;

Third. The most economically operated and best managed ships;

Fourth. Those best equipped financially to 'weather the storm.

Those having the above qualifications will come through pending the hard times we have just entered into, and which we must expect and be prepared for all through 1921 and 1922, and perhaps longer; but human foresight cannot look very far ahead. Put, as we have just passed through a period of prosperous times, it is quite in order to take some of the bad.

I visited New York and discussed with the leading shipowners, the shipping situation. I am sorry to have met for the last tune, George Dearborn, president of the American Hawaiian Steamship Company, who died shortly afterward; and Willard Straight, who died in France. Had an interesting talk with F. A. Vanderlip, the great financier.


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