epresenting a deadweight carrying capacity of about 2,500,000 tons.

The enormous increase in the American Mercantile Marine is of course due mainly to the great ship-building rusade of 1917-18; and the progress of this wonderful Levelopment should be studied in detail. Last year the utput of tonnage of the United States amounted to ,033,000 tons, in comparison with only 1,348,000 tons ross launched in the United Kingdom. Our losses mounted to about 1,940,000, and so substantially exceeded ur new construction. The output in the United Kingdom ell far below that anticipated by the then First Lord of Admiralty (Sir Eric Geddes) in the spring of last year. hat estimate was for 1,800,000 tons, whereas in the best ear yet experienced-1913-approximately 2,000,000 ons were produced. By the spring of last year the overnment had at last been aroused to an appreciation f the urgent need of maximum output; and but for the rong agitation the output must have been far smaller. othing like the 1913 total can be expected for 1919, though the recent decision to reduce warship conruction should leave an opening for much more erchant building than has hitherto been practicable. he decline in the share of the world's shipping taken by ne United Kingdom was shown in the tables issued by loyd's Register early in the year. During the five ears 1894-98 the share of the United Kingdom amounted 744 per cent. of the total output. In the following inquennial periods the proportion was 60 per cent., 8 per cent., and 61 per cent. respectively, thus showing at for the fifteen years 1899-1913 the share of the United ingdom was quite 60 per cent. During the war years 14-18 only 38.6 per cent. of the world's output of ercantile tonnage was launched in the United Kingdom. ne diminution was really the more striking because the gures of the total output for the world during the war d not include the production in Germany and Austriaungary, whereas in the earlier years the figures for Lese countries were included.

It is, of course, true that, but for the absorption of the ip yards of the country on naval work, the production British yards during the war period would have en very much greater. Here, again, in constructing

warships which were at the service not only of herself but also of the Allies and Associated Nations, Great Britain did not think of after-war conditions. These conditions have now to be faced.

For trustworthy figures of present construction we again have to rely upon Lloyd's Register. The last returns available are those for the quarter ended June 30, There were then under construction in the United Kingdom 782 vessels of 2,524,000 tons gross, showing an increase of 269,000 tons as compared with the March quarter, and 709,000 as compared with June 1918. These figures compare with 994 vessels of 3,874,000 tons under construction in the United States. The tonnage building in the United States is consequently 1,350,000 tons more than in this country. Comparing steel ships alone, there are now building in this country 711 steamers of 2,492,000 tons, as compared with 680 steel steamers of 3,165,000 tons building in the United States. Taking steel steamers alone, the tonnage building in the United States is thus still larger than that under construction in this country, although the number of ships is not quite as great. In the American figures 133 steamers of 326,000 tons building on the Great Lakes of North America are included, because the great majority of steamers building lately on the Great Lakes have been for ocean service.

The total tonnage under construction abroad now amounts to 5,494,000 tons. This, with the 2,524,000 tons building in the United Kingdom, gives a total under construction of 8,018,000 tons. It is generally found, at any rate in normal times, that an amount of tonnage equal to that under construction at the end of any quarter is launched within the ensuing twelve months. It is therefore reasonable to assume that a year hence there will be in the water an additional 8,000,000 tons of shipping. This, it will be noticed, falls not far short of the amount of tonnage by which the world is now the poorer in consequence of the war. In other words, a year hence the mercantile marine of the world should represent nearly the amount of tonnage which would have been in existence if there had been no war. One great change brought about will, however, be that a much larger share of the ownership will rest with

ountries other than Great Britain. Further, the tonage now under construction, especially abroad, is largely argo shipping; and, in order to maintain mail and assenger services, Great Britain must build a very large mount of high-class shipping, her liner fleet having -een most seriously depleted.

Freights are still high, and, but for new factors which ave been introduced, a substantial reduction might easonably have been anticipated. One of these chief actors is the heavy cost of shipbuilding, common to all countries. In this country it now costs three or four imes the pre-war price. How this high price affects Freights may be illustrated by an example. A cargo vessel of refrigerated type may have cost 135,000l. to build before the war. The estimate for building such a vessel to-day on the time and line basis would be 500,000l. If interest on this money be calculated at the rate of 5 per cent. and depreciation at the rate of 5 per cent. which, in view of the inflated price is probably far too low, 10 per cent. on this money, representing 50,0007. a year, has to be earned before working expenses begin. These expenses include wages, coal, stores, port dues and pilotage, etc., and are all now on a high scale. A vessel of this type can only be expected to make two round voyages to New Zealand and back in a year, upon which this great sum of money has to be earned. For some months past, vessels have been proceeding to Australasia with very little if any cargo, so that practically the whole amount has to be earned on the two homeward voyages.

Considering the enormous shipbuilding costs to be faced, the prospect of low freights does not seem promising. British shipping companies have in the past been able to rely upon carrying at rates much below those of most other nations, although the working costs of the Scandinavian countries have been lower. Shipbuilding costs in this country, for instance, are now not much lower than in the United States. The costs of construction in the two countries have been gradually approaching the same level—a fact of immense significance. In view of the greatly increased cost of building, it will be in the interest of shipowners in all countries to maintain freights for some time to come on a fairly high level.

Yet, when the competition of much new tonnage prepares the way for falling freights, some of the foreign mercantile marines may find themselves in a more favourable position than our own to meet it. The neutral countries have, ever since the outbreak of the war, been able to earn higher freights, because they were not controlled by Government. British shipping is still so controlled. The continuance of control, which takes the form of direction of voyages and licensing, is a subject often discussed in the shipping exchanges. Every shipping man would like to see control lifted, for he knows that there will be little opportunity for the enterprise by means of which British shipping obtained its former pre-eminent position until it is removed. But the fact has to be recognised that control of food and control of shipping are closely linked together. Thus, all wheat imports are still in the hands of the Wheat Commission; and vessels are directed to load wheat at the various ports at fixed rates. The alternative would be for the Wheat Commission to go into the market and bid for tonnage. Presumably freight rates would rise. At present vessels are directed to load wheat in Argentina at 62s. 6d. per ton or in Australia at 105s. per ton. Many steamers were lately directed to proceed to load at Canadian ports before the closing of river navigation for the season at 10s. per quarter. These rates, although high as compared with pre-war terms, are considered to leave only a small profit, even though the steamers may be able to load a cargo of coals for South America at 40s. a ton. Foreign ships, uncontrolled, are able to secure an advantage of 57. per ton or more for the voyage from South America to the Continent, as compared with the corresponding voyage of British ships to the United Kingdom. The rates in other trades show similar dis crepancies; and in all cases the advantage to the foreign ships may amount to a great many thousands of pounds for practically the same voyage. For bunker coals as much as 60s. a ton has now to be paid. The American ships can bunker in United States ports at the equivalent

of 25s. a ton.

While British ships are controlled in this way, foreign vessels can go where they please and earn the highest freight they can. The discrepancy is again made clear

in the time-charter rates paid for British and foreign steamers. The Liner companies are usually ready to charter vessels, because they have to try to maintain their regular services; and many cargo steamship owners are ready to charter their vessels to them, because they are relieved of the worry of possible serious detention in the ports and delays owing to labour troubles. The risk of delay in consequence of the chaos at the ports is very serious indeed. For some time past the usual rate of time-charter for a fair-sized British steamer has been 258. per ton deadweight per month for twelve months. Quite lately it dropped to 24s. For Japanese or Scandinavian steamers, rates varying from 40s. to 50s. a ton have been quoted. A difference of only 10s. a ton on a steamer of 10,000 tons deadweight means an addition of 5000l. per month to the earning power, or 60,000l. a year-a very substantial advantage indeed for the foreign-owned vessel. It is not in the interest of British shipping that the earnings of British vessels should fall so far below those of foreign ships.

So long as the policy of the nation is to limit the price of food, it may be argued that such control is inevitable. Were control to be relaxed, freights would probably rise at first; and some time might elapse before they fell below the present level of fixed rates. In the mean time there would, no doubt, be a great outcry, although the comparatively small influence of the level of freights on the prices of commodities is little appreciated. It is asserted, for instance, that, although a suit of clothes may now cost in this country 127. 12s., the freight on the wool employed is represented by 6d. The effect of Government control may again be seen very clearly in the North Atlantic trade, where a substantial proportion of the space is still requisitioned by the Government. During September, 50 per cent. of the space was requisitioned at a minimum freight of 42s. 6d. per ton, while a representative rate of freight for similar cargo carried on ships under foreign flags was over 100s. per ton. In short, the British shipowner is still at a great disadvantage as compared with the foreign owner, so far as profits are concerned; and, when the time for free competition comes, the foreign owner will have the satisfaction of knowing that he has large reserves, which