The present situation is such that travelers and merchandise find
Liverpool often a necessary intermediate port between New York and some
of the South American capitals. The fact that some of the delegates from
South American States to the conference of American nations now in
session at Washington reached our shores by reversing that line of
travel is very conclusive of the need of such a conference and very
suggestive as to the first and most necessary step in the direction of
fuller and more beneficial intercourse with nations that are now our
neighbors upon the lines of latitude, but not upon the lines of
established commercial intercourse.

I recommend that such appropriations be made for ocean mail service in
American steamships between our ports and those of Central and South
America, China, Japan, and the important islands in both of the great
oceans as will be liberally remunerative for the service rendered and
as will encourage the establishment and in some fair degree equalize
the chances of American steamship lines in the competitions which they
must meet. That the American States lying south of us will cordially
cooperate in establishing and maintaining such lines of steamships to
their principal ports I do not doubt.

We should also make provision for a naval reserve to consist of such
merchant ships of American construction and of a specified tonnage and
speed as the owners will consent to place at the use of the Government
in case of need as armed cruisers. England has adopted this policy, and
as a result can now upon necessity at once place upon her naval list
some of the fastest steamships in the world. A proper supervision of the
construction of such vessels would make their conversion into effective
ships of war very easy.