TABLE 1. RISE AND DECLINE OF THE AMERICAN MERCHANT FLEET IN FOREIGN TRADE, 1830–90
Even as this point was being made at the end of the war, some analysts doubted whether this diminution could account for the long-term decline of U.S. shipping that set in during the postwar period and continued into the 1880s. Close analysis of the statistics in 1866 by Secretary of the Treasury McCulloch suggested that the loss to flagging-out during the war was about 800,000 tons. Destruction and transfer of commercial vessels to the government for use as warships and transports accounted for the additional decline. Some small fraction of the decline was also due to “natural causes,” such as the retirement or scrapping of older vessels, loss to the hazards of the sea, and other events unrelated to the war. However, the overall immediate decline was certainly a consequence of both the losses to the Confederate raiders and the transfers to foreign flags. U.S. shipping in foreign trade had been reduced from about 5.35 million gross tons to about 4.24 million gross tons.27
However, from the 1870s into the 1880s, the size of the U.S. fleet continued to decline. The failure to rebound and to again challenge Britain for a major share of oceangoing trade was a separate issue, although many writers of the period blurred together the issue of wartime decline and postwar failure to recover. The popular and iconoclastic Frank Leslie’s Illustrated Newspaper joined the discussion, suggesting that the long-term decline was due to the failure of U.S. shipbuilders to remain competitive in the cost of building new ships. The paper estimated that it cost $100 per ton to build a ship in the United States but only $40 per ton to build one in Canada. Furthermore, the paper argued, the decline in U.S. shipping was already evident several years before the war began.28 Similar arguments were presented at the same time by others, such as San Francisco’s Daily Evening Bulletin.29 This position, based on a clearheaded analysis of costs, however, was not shared by others, who continued to blame the decline of U.S. shipping on British support of Confederate cruisers and the British flagging of U.S.-owned ships during the war.
The British finally agreed in 1872, after a process of arbitration, to pay $15.5 million in claims for the losses inflicted on U.S. shipping by British-built cruisers in the Alabama claims case. As that case was being debated, the scale of the British damage to U.S. shipping was magnified by linking the flagging-out to the cruisers’ activities, an argument first made during the war and reiterated after by both Secretary of State William Seward and President Andrew Johnson. If the long-term decline of U.S. shipping could be attributed, even in part, to the practice of flagging-out, that enhanced the legitimacy of the claims against Britain and escalated the scale of the British damage. The arbitration decision, however, rejected such claims for “indirect losses.”30
Thus, in 1865–1872 the claim that a long-term decline had been inflicted by British practices and by flagging-out in particular was seen as a propaganda position of the United States as it sought to press the Alabama claims for a larger amount. Senator Charles Sumner argued that Britain’s liability for prolonging the war and destroying U.S. maritime commerce cost the United States $2.125 billion. The neutral arbiters from Switzerland, Brazil, and Italy, however, limited the compensation to the demonstrated loss of particular ships and cargoes.
Certainly, the decline of U.S. shipping in sheer tonnage persisted for decades after the war. More significant, U.S. shipping continued to decline as a percentage of the world trade; in absolute numbers, the tonnage of the British fleet began to far outdistance the tonnage of the U.S. fleet. One recent study shows the percentage of U.S. tonnage in world trade declining from about 10 percent in 1870 to just over 3 percent in 1890. Over the same period, the British proportion of tonnage in world trade climbed from 44 percent to more than 47 percent.31
The United States did not compete in transoceanic steam lines for decades, and the cost of construction of both wooden ships and iron or steel ships in the United States remained high. As previously noted, because the United States still employed sailing vessels for transatlantic trade, U.S. steamships were not present to engage in port-to-port European trade in competition with steam-powered European vessels, all on shorter-leg voyages that allowed recoaling. U.S. schooners and larger sailing vessels continued in transoceanic trade even into World War I. So the development of steam-powered ships, at first most efficient and economical in coastal and riverine trades but not economic on transoceanic voyages, was an additional factor in preventing a resurgence of U.S. shipping in these years.
With the westward expansion of the United States, labor costs stayed high, attracting an increasing flow of immigrants from Europe and Asia and driving up the cost of ship construction. Import duties on foreign-manufactured machinery and rigging that had been passed in Congress in a vain attempt to protect those U.S. industries also increased the cost of U.S.-built ships, a classic case of unintended consequences.
For shipbuilders and other advocates of the U.S. merchant marine, the issue of flagging-out receded into the past, and suggestions for reform of the present conditions required an analysis of those conditions. However, for writers who reflected on the Civil War itself, on the depredations of the cruisers, and for those who retained suspicions of British motives, the flagging-out during the war years still loomed large as an issue. An 1870 congressional report supported the claim that British wartime acts were responsible for the decline.32
Pro-British critics saw that position as strictly political, and some Republicans falsely blamed the British without addressing the current policy problems. “It is so much easier,” wrote an editorialist for the avowedly pro-British Albion, “to bring a railing accusation against a nation which may for the time be unpopular than to study the causes of any social or commercial phenomenon, that we are not surprised to find both the Congressional Committee on Navigation and President Grant adopting this facile method of explaining the recent decline in American ship-building, and charging the conduct of Great Britain during the late Civil War with many of the results now witnessed.” The article went on to blame the protective tariff for the decline in U.S. shipbuilding.33
Because the two different analyses arose in different forums, two interpretations of the significance of the flagging-out process flourished, each with a different focus, a different point of departure, and a different audience. One might put the viewpoints in two camps: those with a presentist outlook on economic conditions and those with a historical focus. Those concerned with present policy and considering different methods of addressing the decline of shipping saw the flagging-out issue as dead, no longer pertinent in the 1870s, 1880s, and 1890s. Rather, they saw the problem as deriving from U.S. shipbuilders’ inability to compete with Canadian and British labor costs. Editorialists, essayists, and economists hoping to influence Congress remained focused on contemporary aspects of the shipping decline, especially the issue of shipbuilding costs. However, the other group, seeking to unite avid anti-British voters with essentially historical arguments, continued to perceive the decline of U.S. shipping as the result of intentional British action. Both groups saw the decline as reflecting poorly on the status and honor of the nation.
Through the later 1870s and 1880s, proponents of various reforms to address the decline of U.S. shipping continued to focus on causes that went far beyond the Civil War flagging-out issue. The rise of steam propulsion and iron hulls that prevented U.S. competition in the European markets figured prominently in an analysis presented in the Banker’s Magazine and Statistical Register.34 A long analysis presented in the International Review in 1879 also attributed the decline of the U.S. fleet to the rise of steamers and the lack of U.S. focus on steamship construction.35
Book-length treatises arguing for improvements in protective tariffs or subsidies for the shipbuilding and merchant marine industries continued to be published through the era. These included books by Hamilton Hill (1869), Henry Hall (1878), Charles Marshall (1878), and Henry Peabody (1901).36 Many journalists, essayists, and editorialists contributed further observations on the lack of government support for the maritime industries.37
As