The Jones Act
Jones Act Circa 1563
By Charlie Papavizas, Partner, Chair, Maritime Practice, Winston & Strawn LLP
A common misconception regarding the U.S. domestic trading restriction known as the “Jones Act” is that it appeared out of nowhere in 1920. Nothing could be further from the truth. Jones Act seeds were planted by Queen Elizabeth I in 1563.
England’s first maritime trading law -- known as a “navigation act” -- is generally regarded to be a 1381 act adopted by King Richard II, son of Edward the Black Prince. The avowed purpose was “to increase the Navy of England, which is now greatly diminished.” That law was known in the American Colonies centuries later. John Adams, for example, wrote to Thomas Jefferson in 1785 urging individual states to adopt similar laws.
The law also had a mercantile purpose in that it prohibited the export of gold and silver. It was determined that such exports would lead to the “Destruction of the same Realm, which God prohibit.”
The 1381 law restricted much of English foreign trade to “Ships of King’s Liegance.” The problem was that there was no “out” if no such ships were available, and a “technical correction” had to be adopted in 1382, which provided that English vessels only had to be used if they were to “be found able and sufficient.” Another law in 1390 set limits on what rates English vessels could charge, limiting those rates to “reasonable Gains” to prevent price gouging.
These navigation restrictions were expanded, contracted, and otherwise modified over time until they were abruptly repealed in the first year of the reign of Queen Elizabeth I in 1558. The reason given was that other countries had retaliated with their own navigation restrictions such that there had “growen greate displeasure between the forreyne Prynces and the Kinges of this Realm.”
The need to protect English shipping for Navy purposes, however, resurfaced, and England reversed course in 1563 in the fifth year of Queen Elizabeth’s reign. England continued to regulate its maritime trade thereafter, culminating in the most famous navigation acts adopted in 1650, 1660, and 1661 primarily to combat Dutch maritime ascendancy and to tie English colonies tightly to the mother country. The 1660 Act was later referred to as the “Sea Magna Charta” or “Charta Maritima” and remained English policy until the middle of the 19th century.
Among other things, those acts required certain enumerated goods to be shipped to England in English vessels from English colonies, even if their destination was elsewhere, which was a requirement that aggravated the American colonies. These trade restrictions are referenced in the Declaration of Independence as one of the reasons for separation from England.
What is important for our present purposes is that the 1563 Elizabethan law also contained the first outright reservation of English domestic maritime trade to English vessels. Specifically, only English-owned vessels could transport “fish, victuals, wares or things” between English “ports of creeks” upon penalty of the forfeiture of the goods carried or the value thereof.
The first U.S. Congress in 1789 considered adopting a similar domestic trading formulation but determined instead to advantage U.S.-owned vessels by applying much higher duties (more than eight times higher) on foreign-owned vessels in U.S. domestic trade. The issue was not revisited until after the War of 1812 and, more particularly, after the U.S.-Britain Commercial Convention of 1815, which permitted the U.S. to adopt certain shipping restrictions without granting Britain a right to retaliate.
In 1817, the U.S. adopted its “Charta Maritima” copying many parts of the 1660 Navigation Act, including language very similar to the Elizabethan 1563 domestic trade formulation. The 1817 Act was one of the last laws signed by Pres. James Madison before finishing his second term, and it was something he had sought since he was a Congressman starting in 1789.
The critical difference between the U.S. version and the English versions was that the U.S. expressly invited other countries to open their trade to U.S.-flag vessels and in return the U.S. would reciprocate – in the foreign trade. The 1817 Act was a means to an end in the foreign trade – the English Navigation Act trade restrictions were the policy end regardless of what other countries did.
In the following years, country by country entered into reciprocal open maritime trade agreements with the U.S., and the 1817 foreign trade reservations to U.S.-owned vessels disappeared. There were many efforts after the Civil War up to and including in the Merchant Marine Act of 1920 to revive those restrictions – but that is a subject for another article.
For the U.S. domestic maritime trade, the 1817 Act restricted to U.S. citizen-owned vessels the trade of “goods, wares, or merchandise” between U.S. “ports” upon penalty of forfeiture of the items transported. In other words, the 1817 Act domestic trade restriction was virtually the same as the 1563 Elizabethan restriction.
Notably, the 1817 Act restriction did not restrict U.S. domestic trade to U.S.-registered vessels, often referred to as “U.S.-flag vessels.” That change was not made until 1898. Other changes were made over time to this domestic trading restriction to expand its scope of other activities (like transporting passengers and engaging in dredging and towing), to other places (like newly acquired territories including Alaska, Hawaii, and Puerto Rico), and to close loopholes.
What Congress did in 1920 under the leadership of Sen. Wesley Livsey Jones was the latter, which was to close a loophole. The original 1817 Act was also restated to, among other things, apply the restriction between “points” in the United States rather than “ports” – but the 1817/1563 concept remained unchanged. So, the next time you read about the “Jones Act” and how it is either a great or terrible “100-year old law,” you can remember that whatever it is, it is definitely much older than that.
About the Author:
Constantine (Charlie) Papavizas is a partner in the international law firm of Winston & Strawn LLP resident in Washington, D.C. and is the chair of its maritime practice group. Mr. Papavizas represents ship owners, operators and managers, shipyards, energy companies, marine construction companies, financial institutions and a variety of other interests in the world-wide maritime and energy industries. He has authored a number of articles on a variety of topics including offshore wind development and the Jones Act. Mr. Papavizas is also the co-author of the Practising Law Institute’s Maritime Law Answer Book and has been quoted in a number of publications on a variety of shipping topics.