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+The Project Gutenberg eBook, Manual of Ship Subsidies, by Edwin M. Bacon
+
+
+This eBook is for the use of anyone anywhere at no cost and with
+almost no restrictions whatsoever.  You may copy it, give it away or
+re-use it under the terms of the Project Gutenberg License included
+with this eBook or online at www.gutenberg.org
+
+
+
+
+
+Title: Manual of Ship Subsidies
+
+Author: Edwin M. Bacon
+
+Release Date: October 11, 2004  [eBook #13718]
+
+Language: English
+
+Character set encoding: ISO-8859-1
+
+
+***START OF THE PROJECT GUTENBERG EBOOK MANUAL OF SHIP SUBSIDIES***
+
+
+E-text prepared by Audrey Longhurst and the Project Gutenberg Online
+Distributed Proofreading Team
+
+
+
+MANUAL OF SHIP SUBSIDIES
+
+An Historical Summary of the Systems of All Nations
+
+by
+
+EDWIN M. BACON, A.M.
+
+1911
+
+
+
+
+
+
+
+CONTENTS
+
+CHAPTER
+
+        PREFACE
+I       INTRODUCTORY
+II      GREAT BRITAIN
+III     FRANCE
+IV      GERMANY
+V       HOLLAND-BELGIUM
+VI      AUSTRIA-HUNGARY
+VII     ITALY
+VIII    SPAIN-PORTUGAL
+IX      DENMARK-NORWAY-SWEDEN
+X       RUSSIA
+XI      JAPAN-CHINA
+XII     SOUTH AMERICA
+XIII    THE UNITED STATES
+XIV     SUMMARY
+        INDEX
+
+
+
+
+PREFACE
+
+
+The intent of this little book is to furnish in compact form the history
+of the development of the ship subsidies systems of the maritime nations
+of the world, and an outline of the present laws or regulations of those
+nations. It is a manual of facts and not of opinions. The author's aim
+has been to present impartially the facts as they appear, without color
+or prejudice, with a view to providing a practical manual of information
+and ready reference. He has gathered the material from documentary
+sources as far as practicable, and from recognized authorities, American
+and foreign, on the general history of the rise and progress of the
+mercantile marine of the world as well as on the special topic of ship
+subsidies. These sources and authorities are named in the footnotes, and
+volume and page given so that reference can easily be made to them for
+details impossible to give in the contracted space to which this manual
+is necessarily confined.
+
+                                              E.M.B.
+
+  BOSTON, MASS.
+  September 1, 1911.
+
+
+
+
+
+
+CHAPTER I
+
+INTRODUCTORY
+
+
+The term _subsidy_, defined in the dictionaries as a Government grant in
+aid of a commercial enterprise, is given different shadings of meaning
+in different countries. In all, however, except Great Britain, it is
+broadly accepted as equivalent to a bounty, or a premium, open or
+concealed, directly or indirectly paid by Government to individuals or
+companies for the encouragement or fostering of the trade or commerce of
+the nation granting it.
+
+Ship subsidies are in various forms: premiums on construction of
+vessels; navigation bounties; trade bounties; fishing bounties; postal
+subsidies for the carriage of ocean mails; naval subventions; Government
+loans on low rates of interest.
+
+In Great Britain they comprise postal subsidies and naval subventions,
+ostensibly payments for oversea and colonial mail service exclusively,
+or compensation for such construction of merchant ships under the
+Admiralty regulations as will make them at once available for service as
+armed cruisers and transports. They are assumed to be not bounties in
+excess of the actual value of the service performed, with the real
+though concealed object of fostering the development of British overseas
+navigation. Still, notwithstanding this assumption, such has been their
+practical effect.
+
+Their original objects when first applied to steamship service, as
+defined by a Parliamentary committee in 1853, were--"to afford us rapid,
+frequent, and punctual communications with distant ports which feed the
+main arteries of British commerce, and with the most important of our
+foreign possessions; to foster maritime enterprise; and to encourage the
+production of a superior class of vessels, which would promote the
+convenience and wealth of the country in time of peace, and assist in
+defending its shores against hostile aggression." To foster British
+commerce they have undeniably been employed to meet and check foreign
+competition on the seas, as the record shows.
+
+In the United States they have taken the form of postal subsidies openly
+granted for the two-fold purpose of the transportation of the ocean
+mails in American-built and American-owned ships, and the encouragement
+of American shipbuilding and ship-using.
+
+
+
+
+CHAPTER II
+
+GREAT BRITAIN
+
+
+England has never granted general ship-construction or navigation
+bounties except in the reigns of Elizabeth and James I. Under Elizabeth
+Parliament offered a bounty of five shillings per ton to every ship
+above one hundred tons burden; and under James I that law was revived,
+with the bounty applying only to vessels of two hundred tons or over.[A]
+
+A policy of Government favoritism to shipping, however, began far back
+in the dim ninth century with Alfred the Great. Under the inspiration of
+this Saxon of many virtues, his people increased the number of English
+merchant vessels and laid the foundation for the creation and
+maintenance of a royal navy.[B] The Saxon Athelstan, Alfred's grandson,
+whose attention to commerce was also marked, first made it a way to
+honor, one of his laws enacting that a merchant or mariner successfully
+accomplishing three voyages on the high seas with a ship and a cargo of
+his own should be advanced to the dignity of a thane (baron).[C]
+
+The first navigation law was enacted in the year 1381, fifth of Richard
+II. This act, introduced "to awaken industry and increase the wealth of
+the inhabitants and extend their influence,"[D] ordained that "none of
+the King's liege people should from henceforth ship any merchandise in
+going out or coming within the realm of England but only in the ships of
+the King's liegeance, on penalty of forfeiture of vessel and cargo."[E]
+
+This act of Richard II was the forerunner of the code of Cromwell, which
+came to be called the "Great Maritime Charter of England," and the
+fundamental principles of which held up to the second quarter of the
+nineteenth century.
+
+Under Charles I was enacted (1646) the first restrictive act with
+relation to the commerce of the colonies, which ordained "That none in
+any of the ports of the plantations of Virginia, Bermuda, Barbados, and
+other places of America, shall suffer any ship or vessel to lade any
+goods of the growth of the plantations and carry them to foreign ports
+except in English bottoms," under forfeiture of certain exemptions from
+customs.[F] It was followed up four years later (1650) under the
+Commonwealth, by an act prohibiting "all foreign vessels whatever from
+lading with the plantations of America without having obtained a
+license."[G]
+
+Cromwell's code, of which the act of 1381 was the germ, was established
+the next year, 1651. Its primary object was to check the maritime
+supremacy of Holland, then attaining dominance of the sea; and to strike
+a decisive blow at her naval power. The ultimate aim was to secure to
+England the whole carrying trade of the world, Europe only excepted.[H]
+These were its chief provisions: that no goods or commodities whatever
+of the growth, production, or manufacture of Asia, Africa, or America
+should be imported either into England or Ireland, or any of the
+plantations, except in English-built ships, owned by English subjects,
+navigated by English masters, and of which three-fourths of the crew
+were Englishmen; or in such ships as were the real property of the
+people of the country or place in which the goods were produced, or from
+which they could only be, or most usually were, exported.[I] This last
+clause was the blow direct to Holland, for the Dutch had little native
+products to export, and their ships were mainly employed in carrying the
+produce of other countries to all foreign markets. It was answered with
+war, the fierce naval war of 1652-1654, in which was exhibited that
+famous spectacle of the at first victorious Dutch admiral, Van Tromp,
+sweeping the English Channel with a broom at his masthead.
+
+With the final defeat of the Dutch after hard fighting on both sides,
+their virtual submission to the English Navigation Act, and their
+admission of the English "sovereignty of the seas,"[J] by their consent
+to "strike their flag to the shipping of the Commonwealth," England, in
+her turn, became the chief sea power of the world.[K] During the ten
+years of peace that followed, however, the Dutch despite the English
+Navigation Act, succeeded in increasing their shipping, and regained
+much of the carrying trade if not their lost leadership.[L]
+
+Cromwell's act was confirmed by Charles II in 1660, and made the basis
+of the code which then her statesmen exalted as "The Great Maritime
+Charter of England."
+
+Early in Charles II's reign also (in 1662) indirect bounties were
+offered for the encouragement of the building of larger and more
+efficient ships for service in time of war. These were grants of
+one-tenth of the customs dues on the cargo, for two years, to every
+vessel having two and one-half or three decks, and carrying thirty
+guns.[M] Thirty years later (1694), in William and Mary's reign, the
+time was extended to three years. Under William and Mary the granting of
+bounties on naval stores was begun, and this system was continued till
+George III's time.[M] With William and Mary's reign also began the
+giving of indirect bounties to fishermen for the catching and curing of
+fish. After the middle of the eighteenth century vessels engaged in the
+fisheries were regularly subsidized, with the object of training sailors
+for the merchant marine and the royal navy.[M]
+
+While the fundamental rules of the "Maritime Charter" of 1660 remained
+practically unimpaired, although in the succeeding years hundreds of
+regulating statutes were passed, breaks were made in the restrictive
+barriers of the code during the first third of the nineteenth century by
+the adoption of the principle of maritime reciprocity.[N] In 1815 (July
+3) a convention establishing a "reciprocal liberty of commerce," between
+the "territories of Great Britain in Europe and those of the United
+States," was signed in London.[O] In 1824-1826 reciprocity treaties were
+entered into with various continental powers. In 1827 (August 6) the
+treaty of 1815 with the United States was renewed. In 1830 a treaty for
+regulating the commercial intercourse between the British colonial
+possessions and the United States was executed.[P] Under these
+conventions, repeatedly interrupted by British Orders in Council and by
+Presidents' proclamations,[Q] the trading intercourse between both
+countries was regulated till the abrogation of the code of 1660.
+
+In 1844 an indirect move against the code was made, with the appointment
+of a committee of the House of Commons to inquire into the working of
+the reciprocal treaties and the condition of the mercantile marine of
+the country.[R]
+
+At this period the competition of the United States in the overseas
+carrying trade of the world was hard pressing England. The Americans
+were building the best wooden ships, superior in model and
+seaworthiness, the fastest sailers. They were leading in shipbuilding.
+Much of the British shipping trade was carried on in American-built
+vessels. The splendid American clipper ships were almost monopolizing
+the carrying trade between Great Britain and the United States. Most of
+the shipping of the world was yet in wooden bottoms. Iron ships were in
+service, but iron-shipbuilding was in its infancy.
+
+The Parliamentary inquiry of 1844 was followed up in 1847 with a move
+openly against the ancient code. Its principles as they then stood,
+essentially as in 1660, despite the multitude of regulating statutes,
+are thus enumerated:
+
+     1. Certain named articles of European produce could only be
+     imported into the United Kingdom for consumption in British
+     ships, or in ships of the country of which the goods were the
+     produce, or of the country from which they were usually imported.
+
+     2. No produce of Asia, Africa, or America could be imported for
+     consumption into the United Kingdom from Europe in any ships; and
+     such produce could only be imported from any other place in
+     British ships, or in ships of the country of which the goods were
+     the produce and from which they were usually imported.
+
+     3. No goods could be carried coastwise from one part of the
+     United Kingdom to another in any but British ships.
+
+     4. No goods could be exported from the United Kingdom to any of
+     the British possessions in Asia, Africa, or America (with some
+     exceptions with regard to India) in any but British ships.
+
+     5. No goods could be carried from any one British possession in
+     Asia, Africa, or America, to another, nor from one part of such
+     possession to another part of the same, in any but British ships.
+
+     6. No goods could be imported into any British possession in
+     Asia, Africa, or America in any but British ships, or in ships of
+     the country of which the goods were the produce; provided, also,
+     that such ships brought the goods from that country.
+
+     7. No foreign ships were allowed to trade with any of the British
+     possessions unless they had been especially authorized to do so
+     by an Order in Council.
+
+     8. Powers were given to the Queen in Council which enabled her to
+     impose differential duties on the ships of any foreign country
+     which did the same with reference to British ships; and also to
+     place restrictions on importations from any foreign countries
+     which placed restrictions on British importations with such
+     countries.
+
+Finally, in 1849, with the adoption of the commercial policy founded on
+freedom of trade, came the repeal of the restrictive code, excepting
+only the rule as to the British coasting trade; and in 1854 the
+restrictions on that trade were removed, throwing it also open to the
+participation of all nations.
+
+Meanwhile the British ocean-mail subsidy system for steamship service,
+instituted with the satisfactory application of steam to ocean
+navigation, in the late eighteen-thirties, had become established: the
+first contract for open ocean service, made in 1837, being for the
+carriage of the Peninsular mails to Spain and Portugal. Although
+successful ventures in transatlantic steam navigation had begun nearly a
+score of years earlier, the practicability of the employment of steam in
+this service was not fully tested to the satisfaction of the British
+Admiralty till 1838.
+
+In this, as in so many other innovations, Americans led the way. The
+first steamer to cross the Atlantic was an American-built and
+American-manned craft. This pioneer was the _Savannah_, built in New
+York and bought for service between Savannah and Liverpool. She was a
+full-rigged sailing-vessel, of 300 tons, with auxiliary steam power
+furnished by an engine built in New Jersey. Her paddles were removable,
+so fashioned that they could be folded fan-like when the ship was under
+sail only.[S] She made the initial voyage, from Savannah to Liverpool,
+in the Summer of 1819, and accomplished it in twenty-seven days,[T]
+eighty hours of the time under steam. Afterwards she made a trip to St.
+Petersburg, partly steaming and partly sailing, with calls at ports
+along the way. Her gallant performance attracted wide attention, but
+upon her return to America she finally brought up at New York, where her
+machinery was removed and sold.
+
+An English-built full-fledged steamer made the next venture, but not
+until a decade after the _Savannah's_ feat. This was the _Curaçoa_, 350
+tons, and one hundred horsepower, built for Hollanders, and sent out
+from England in 1829. The third was by a Canada-built ship--the _Royal
+William_, 500 or more tons, and eighty horsepower, with English-built
+engines, launched at Three Rivers. She crossed from Quebec to Gravesend
+in 1833. The next were the convincing tests that settled for the
+Admiralty the question of transatlantic mail service by steamship
+instead of sailing packet. These were the voyages out and back of the
+_Sirius_ and the _Great Western_ in 1838.
+
+The _Sirius_ had been in service between London and Cork. The _Great
+Western_ was new, and was the first steamship to be specially
+constructed for the trade between England and the United States. Both
+were much larger than their three predecessors in steam transatlantic
+ventures, and better equipped. The _Sirius_ started out with ninety-four
+passengers, on the fourth of April, 1838, and reached New York on the
+twenty-first, a passage of seventeen days. The _Great Western_, also
+with a full complement of passengers, left three days after the
+_Sirius_, sailing from Bristol, and swung into New York harbor on the
+twenty-third, making her passage in two days' less time than her rival.
+Both were hailed in New York with "immense acclamation." They sailed on
+their homeward voyage in May, six days apart, and made the return
+passage respectively in sixteen and fourteen days. The _Great Western_
+on her second homeward voyage beat all records, making the run in twelve
+days and fourteen hours, and "bringing with her the advices of the
+fastest American sailing-ships which had started from New York long
+before her."[U] This clinched the matter. The Admiralty now invited
+tenders for the transatlantic mail service, by steam, between Liverpool,
+Halifax, and New York.
+
+The first call for tenders was made in October, 1838. The St. George's
+Packet Company, owners of the _Sirius_, and the Great Western Steamship
+Company, owners of the _Great Western_, put in bids, the former offering
+a monthly service between Cork, Halifax, and New York for a yearly
+subsidy of sixty-five thousand pounds; the latter, a monthly service
+between Bristol, Halifax, and New York for forty-five thousand pounds a
+year.
+
+Neither offer was accepted for the reason, as was stated, that a
+semimonthly service was desired.[V] Instead, private arrangements were
+made with Samuel Cunard and associates for a carriage between Liverpool,
+Halifax, Quebec, and Boston, twice a month, for a term of seven years,
+the subsidy to be sixty thousand pounds annually, less four thousand
+pounds for making only one voyage a month in the winter season.[W] The
+contract required Mr. Cunard and his associates to furnish five ocean
+steamships and two river steamers, the latter on the St. Lawrence.[V]
+There were also definite restrictions as to turning their steamers over
+to the Government for use in time of war. All were to be inspected by
+Admiralty officers, and were to carry officers of the navy to care for
+the mails.[X] The service was started with the _Britannia_, the first of
+the four to be finished, sailing from Liverpool for Boston on July 4,
+1840. Thus was begun the career of the celebrated Cunard Line. In 1841
+the subsidy was increased to eighty thousand pounds, and the number of
+steamers to five; and in 1846, a further increase brought the subsidy to
+eighty-five thousand pounds.[Y]
+
+The Admiralty's favoritism toward the Cunard associates aroused a
+protest from the unsuccessful bidders for the subsidy, and at length the
+Great Western Company, whose bid had been the lowest, caused a
+Parliamentary inquiry to be made into the transaction. They complained
+that a monopoly had been granted "to their injury and to that of other
+owners of steamships engaged in the trade, and who were desirous of
+entering it"; and they asked the inquiry on the broad grounds "that the
+public were taxed for a service from which one company alone derived the
+advantage, and which could be equally well done and at less expense if
+mails were sent out by all steamers engaged in the trade, each receiving
+a certain amount percentage on the letters they carried."[Z] Although
+the fact was brought out in the testimony that the Great Western Company
+had offered to perform the service on practically the same basis as the
+Cunard associates, and that afterwards the Great Western had proposed to
+do it at half the subsidy to the Cunarders, the investigating committee
+sustained the Admiralty's action.[AA]
+
+The Great Western Company overcame the advantage of the Cunarders in the
+latter's high mail subsidy by increased enterprise and superior
+management; and prospered. In 1843 they launched the _Great Britain_,
+the largest and finest steamship up to that period built for overseas
+service.[AB] She was, moreover, distinguished as the first liner to be
+built of iron instead of wood, and to be propelled by the screw instead
+of the paddle-wheel. In the latter innovation, however, she was not the
+pioneer. Again the Americans were first in the application of the
+auxiliary screw to ocean navigation,[AC] as they had been first in
+despatching a steamer across the Atlantic.
+
+The initial transatlantic subsidy to the Cunard Company was followed up
+in 1840 and 1841 with contracts for steam mail-carriage to the West
+Indies and South American ports.[AD] The first (1840) went to the Royal
+Mail Steam Packet Company, for the West Indian service, the mail subsidy
+fixed at two hundred and forty thousand pounds a year;[AE] the second
+(1841), to the Pacific Steam Navigation Company. The latter enterprise
+was promoted by an American,[AF] after he had failed to obtain support
+in his own country[AG] for a project to establish an American steamship
+line to ports along the west coast of South America, a field in which
+American sailing ships had long been preëminent.[AH]
+
+Up to 1847 the British lines monopolized the transatlantic service. Then
+the situation became enlivened by the advent of competing American
+steamships subsidized by the United States Government, with high-paying
+mail contracts. The first of these was the New York, Havre, and Bremen
+line starting in 1847; the next, the celebrated Collins Line between New
+York and Liverpool, underway in 1850. The competing vessels were
+American-built, wooden side-wheelers; those of the Collins Line superior
+in equipment and in passenger accommodations, and faster sailers, than
+the British craft.[AI] To meet this competition the Cunard Company
+increased their fleet while the Admiralty increased the subsidy. Four
+new steamers were first added, in 1848, to run directly between
+Liverpool and New York, and the postal subsidy was raised to one hundred
+and forty-five thousand pounds a year for forty-four voyages--three
+thousand nine hundred and twenty-five pounds a voyage.[AJ] The
+competition began sharply with the regular running of the Collins
+liners, in 1850. Meanwhile during this year and the next additional
+contracts were given the Cunard Company for carrying the mails between
+Halifax, New York, and Bermuda, on the North American side, in small
+steamers, fitted with space for mounting an 18-pounder pivot-gun,
+subsidy ten thousand six hundred pounds a year; and for a monthly mail
+conveyance between Bermuda and St. Thomas, subsidy four thousand one
+hundred pounds a year.[AK] These services united the West Indies with
+the United States and Canada.[AK]
+
+In 1851 John Inman entered the trade with his "Inman Line" of
+transatlantic screw steamers, which were to carry general cargo and
+emigrant passengers, then a steadily increasing business, and to be
+independent in all respects of either the Admiralty or the
+Post-Office.[AL] The unsubsidized line prospered. The next year (1852)
+the Cunard Company increased their liners' horsepower, and the Admiralty
+again increased their subsidy. The contract, now made to run for ten
+years, provided a subsidy of one hundred and seventy-three thousand
+three hundred and forty pounds per fifty-two round trips a year. The
+Americans were pressing them closer. Now freight rates were cut, and the
+British premier is quoted as advising the Cunard Company to run without
+freight if necessary to "beat off the American line."[AM] The increasing
+subsidies occasioned a Parliamentary investigation. The committee,
+evidently impressed by the gravity of the American competition, reported
+that "the cost of the North American service was not excessive," but
+they advised that all contracts thereafter "be let at public
+bidding."[AN] This recommendation was not heeded. In 1857, upon the plea
+that the Americans were about to build larger and more powerful liners,
+the Cunard Company asked a five years' extension of the contract of
+1852. The extension was promptly granted. At the same time they were
+awarded an additional subsidy of three thousand pounds for a monthly
+mail service between New York and Nassau in the Bahamas.[AO] The next
+year (1858) after suffering crushing disasters in the loss of two of
+their steamers, and the withdrawal of their subsidy, the Collins Company
+failed, and their line was abandoned.[AP] So this competition ended.
+
+Meanwhile complaints of the Admiralty's partiality in the allotment of
+the contracts had been renewed more vigorously, with wider criticism of
+grants for mail carriage largely in excess of the postage received; and
+in 1859-60 another Parliamentary investigation was made. The ultimate
+result of this inquiry was a radical change in the system. The
+management of the ocean mail-service was taken from the Admiralty and
+placed wholly in the hands of the Post-Office Department; and at the
+expiration of the Cunard Company's extended contract, the service was
+thrown open to public competition, as the Parliamentary committee of
+1846 had advised.
+
+Bids were now received from the Cunard, the Inman, the North German
+Lloyd, and other lines. The Inman Company had previously offered to
+perform the service, and had done so for sea-postage only.[AQ] Contracts
+were finally concluded with the three named. The contract with the Inman
+Line was for a fortnightly Halifax service, for seven hundred and fifty
+pounds the round trip, nineteen thousand five hundred pounds a year, and
+a weekly New York service for sea-postage. That with the Cunard Line was
+for a weekly service to New York at a fixed subsidy of eighty thousand
+pounds. That with the North German Lloyd was for a weekly service, at
+the sea-postage. These contracts were to run for a year only. The
+Cunard's subsidy, although considerably less than half the amount that
+the company had received the previous ten years, showed a loss to the
+Government, at sea-postage rates, of forty-four thousand one hundred and
+ninety-six pounds, since the amount actually earned at sea-postage
+rates was twenty-eight thousand six hundred and eighty-six pounds.[AR]
+
+When advertisements for tenders were next issued, it was found that the
+Cunard and Inman companies had formed a "community of interests," with
+an agreement not to underbid each other. They asked a ten years'
+contract on the basis of fifty thousand pounds fixed subsidy for a
+weekly service. Instead, they were awarded seven years' contracts: the
+Cunard for a semi-weekly service, seventy thousand pounds subsidy; the
+Inman, for a weekly service, thirty-five thousand pounds subsidy.[AR] At
+the same time contracts were made with the North German Lloyd and the
+Hamburg-American lines for a weekly service for the sea-postage.
+
+The Cunard and Inman grants were sharply criticised, and a Parliamentary
+committee was appointed to investigate them. The committee's report
+sustained the critics. It observed that "the payments to be made when
+compared with those made by the American Post Office for the homeward
+mails are widely different, inasmuch as the American Post Office has
+hitherto paid only for actual services rendered at about half the rate
+of the British Post Office when paying by the quantity of letters
+carried." The committee recommended that these contracts be disapproved,
+and that the system of fixed subsidies be abolished. "Under all
+circumstances," they concluded, "we are of the opinion that, considering
+the already large and continually increasing means of communication with
+the United States, there is no longer any necessity for fixed subsidies
+for a term of years in the case of this service."[AS] This
+recommendation, however, was not accepted, and the contracts were duly
+ratified.
+
+The report of this Parliamentary committee is significant in the
+evidence it indirectly affords, confirming the declaration of
+1853,[AT]--that the postal subsidies were not as assumed, payments
+solely for services rendered, but in fact were concealed bounties.
+
+In 1871-72, when a renewed effort was made to establish an American
+line of American-built ships,[AU] the British subsidies were again
+increased. Then, also, was instituted by the Admiralty the naval
+subvention system--the payment of annual retainers to certain classes of
+merchant steamers, the largest and swiftest, in readiness for quick
+conversion into auxiliary naval ships in case of war, and to preclude
+their becoming available for the service of any power inimical to
+British interests.
+
+At the expiration of the Cunard and Inman seven years' contracts the
+postmaster-general applied the principle of payment according to weight
+throughout for the carriage of the North American mails. But preference
+was given to British ships, these receiving higher rates per pound than
+the foreign. In 1887 an arrangement was entered into by which the Cunard
+and Oceanic lines were to carry all mails except specially directed
+letters, and the pay was reduced.[AV] This method of payment continued
+till 1903.
+
+Then another sharp change was made in the subsidy system to meet
+another, and most threatening American move. In 1902 was formed by
+certain American steamship men, through the assistance of J. Pierpont
+Morgan, the "International Mercantile Marine Company," in popular
+parlance, the "Morgan Steamship Merger," a "combine" of a large
+proportion of the transatlantic steam lines.[AW] Upon this, in response
+to a popular clamor, subsidy, and in a large dose, was openly granted to
+sustain British supremacy in overseas steam-shipping. To keep the Cunard
+Line out of the American merger, and hold it absolutely under British
+control and British capitalization, and, furthermore, to aid the company
+immediately to build ships capable of equalling if not surpassing the
+highest type of ocean liners that had to that time been produced (the
+highest type then being German-built steamers operating under the German
+flag), the Cunard Company were resubsidized with a special fixed subsidy
+of three-quarters of a million dollars a year, instead of the Admiralty
+subvention of about seventy-five thousand dollars, and in addition to
+their regular mail pay, the subsidy to run for a period of twenty years
+after the completion of the second of two high-grade, high-speed ocean
+"greyhounds" called for for the Atlantic trade. The Government were to
+lend the money for the construction of the two new ships at the rate of
+2-3/4 per cent per annum, the company to repay the loan by annual
+payments extending over twenty years. The company on their part pledged
+themselves, until the expiry of the agreement, to remain a purely
+British undertaking, the management, the stock of the corporation, and
+their ships, to be in the hands of or held by British subjects only.
+They were to hold the whole of their fleet, including the two new
+vessels, and all others to be built, at the disposal of the Government,
+the latter being at liberty to charter or purchase any or all at agreed
+rates. They were not to raise freights unduly nor to give any
+preferential rates to foreigners.[AX] The subsidy is equivalent to about
+twenty thousand dollars for an outward voyage of three thousand miles.
+
+       *       *       *       *       *
+
+Of the British colonies, Canada grants mail and steamship subsidies, and
+fisheries bounties. In 1909-10 the Dominion's expenditures in mail and
+steamship subsidies amounted to a total equivalent to $1,736,372. The
+amount appropriated for 1910-11 increased to $2,054,200; while the
+estimates for 1911-12 reached a total of $2,006,206. In these estimates
+the larger items were: for service between Canada and Great Britain;
+Australia by the Pacific; Canadian Atlantic ports and Australia and New
+Zealand; South Africa; Mexico by the Atlantic, and by the Pacific; West
+Indies and South America; China and Japan; Canada and France.[AY] The
+home Government pays the same amount as Canada toward maintaining the
+China and Japan, and British West Indies services.[AZ] The fisheries
+bounties amounted to one hundred and sixty thousand dollars in 1909.[BA]
+
+       *       *       *       *       *
+
+The grand total of subsidies and subventions paid by Great Britain and
+all her colonies in 1911 approximate ten million dollars annually. The
+subsidies and mail pay of the Imperial Government amounted, in round
+numbers, to four million dollars, of which, in 1910, the Cunard Company
+received seven hundred and twenty-nine thousand dollars.[BB] Besides the
+Admiralty subventions, retainer bounties are paid to merchant seamen and
+fishermen of the Royal Naval Reserve.
+
+Since the establishment of steam in regular ocean navigation, and the
+substitution of iron for wooden ships, England has maintained her
+leadership among the maritime nations. The total tonnage of the United
+Kingdom and her colonies, steam and sailing ships, in 1910-11, stood at
+19,012,294 tons.[BC] nearly four fold that of any other nation.
+
+FOOTNOTES:
+
+[Footnote A: Royal Meeker, "History of Ship Subsidies."]
+
+[Footnote B: John E. Green, "Short History of the English People."]
+
+[Footnote C: W.H. Lindsay, "History of Merchant Shipping."]
+
+[Footnote D: Lindsay.]
+
+[Footnote E: David A. Wells, "Our Merchant Marine," p. 96.]
+
+[Footnote F: John Lewis Ricardo, "The Anatomy of the Navigation Laws,"
+p. 111.]
+
+[Footnote G: Lindsay, vol. III.]
+
+[Footnote H: Lindsay, "Our Navigation Laws"; also his History.]
+
+[Footnote I: Ricardo; also Lindsay in other words.]
+
+[Footnote J: Meaning the waters between Great Britain and the
+continent.]
+
+[Footnote K: Green, p. 593.]
+
+[Footnote L: Ricardo, p. 26.]
+
+[Footnote M: Meeker.]
+
+[Footnote N: W.W. Bates, "American Marine," pp. 57-59.]
+
+[Footnote O: John Macgregor, "Commercial Tariffs."]
+
+[Footnote P: Lindsay, vol. III, p. 65.]
+
+[Footnote Q: Macgregor.]
+
+[Footnote R: Lindsay, vol. III, p. 69; also pp. 53-54 and 107.]
+
+[Footnote S: Rear-Admiral George H. Preble, "Chronological History of
+Steam Navigation."]
+
+[Footnote T: Preble. Lindsay says thirty-seven.]
+
+[Footnote U: Preble, p. 137; also Bates, p. 185.]
+
+[Footnote V: Meeker.]
+
+[Footnote W: Parliamentary papers 1839, vol. XLVI, no. 566, as to the
+private contract.]
+
+[Footnote X: Lindsay, vol. IV.]
+
+[Footnote Y: Meeker; also Parl. papers 1849, vol. XII, no. 571.]
+
+[Footnote Z: Lindsay, vol. X; also Parl. papers, report H. of C., Aug.,
+1840.]
+
+[Footnote AA: Report of Select Com. (1846) Parl. papers, vol. XV, no.
+565, p. 3.]
+
+[Footnote AB: Lindsay, vol. IV.]
+
+[Footnote AC: The _Princeton_, sloop-of-war fitted with the Ericsson
+screw, launched the same year.]
+
+[Footnote AD: Lindsay, vol. IV, p. 198, _note_.]
+
+[Footnote AE: John R. Spears, "The Story of the American Merchant
+Marine," pp. 254-255.]
+
+[Footnote AF: William Wheelwright, of Newburyport, Massachusetts,
+sometime American consul at Guayaquil.]
+
+[Footnote AG: Winthrop L. Marvin, "The American Merchant Marine," p.
+231; also Preble; and Lindsay, vol. IV, pp. 316-330.]
+
+[Footnote AH: Marvin, p. 231.]
+
+[Footnote AI: See p. 76, _post_.]
+
+[Footnote AJ: Meeker.]
+
+[Footnote AK: Lindsay, vol. IV, p. 198, _note_.]
+
+[Footnote AL: Wells, p. 148.]
+
+[Footnote AM: Bates, p. 87; also p. 130.]
+
+[Footnote AN: Meeker.]
+
+[Footnote AO: Meeker.]
+
+[Footnote AP: See p. 77, _post_.]
+
+[Footnote AQ: Meeker.]
+
+[Footnote AR: Meeker.]
+
+[Footnote AS: Parl. papers, 1867-68, 1868-69.]
+
+[Footnote AT: See p. 20, _ante_.]
+
+[Footnote AU: The American Steamship Co. of Phila., with 4 iron steamers
+built on the Delaware--the _Pennsylvania_, _Ohio_, _Indiana_, and
+_Illinois_.]
+
+[Footnote AV: Meeker.]
+
+[Footnote AW: Ultimately embracing the American, Red Star, White Star,
+Atlantic Transport, and Dominion Lines.]
+
+[Footnote AX: For details of this contract see report of (U.S.)
+commissioner of navigation for 1903, pp. 48-52, and 224-268. The two
+steamships called for were the _Lusitania_, 31,550 gross tons, launched
+June 7, 1906; and the _Mauretania_, 31,937 gross tons, launched Sept.
+19, 1906, both quadruple screw turbines, about 70,000 horsepower; the
+largest, fastest, and completest steamers afloat till the production in
+1911 of the _Olympic_, 45,324 gross tons, of the International
+Mercantile Marine Co.'s White Star Line.]
+
+[Footnote AY: U.S. consul, Charlottetown, P.E.I. in daily Con. Repts.
+(Jan. 20) 1911, no. 16.]
+
+[Footnote AZ: Consul General Small, Halifax, in Con. Repts. (Dec.) 1905,
+no. 303.]
+
+[Footnote BA: The American Year Book, 1911.]
+
+[Footnote BB: American Year Book, 1911.]
+
+[Footnote BC: Lloyd's Register, 1910-11.]
+
+
+
+
+CHAPTER III
+
+FRANCE
+
+
+France has been rightly termed the bounty-giving nation _par
+excellence_.[BD] She first adopted a policy of State protection of
+native shipping in the middle of the sixteenth century with the
+enactment (1560) of an exclusive Navigation Act, forbidding her subjects
+to freight foreign vessels in any port of the realm, and prohibiting
+foreign ships from carrying any kind of merchandise from French
+ports.[BE] This was followed up in the next century with the institution
+of the direct bounty system to foster French-built ships.[BD]
+
+In the reign of Louis XIV, Colbert, Louis's celebrated finance minister,
+perfected (about 1661) an elaborate system of navigation laws, evidently
+copied from the rigorous English code. This was directed primarily
+against the commerce of Holland and England, with the ultimate object of
+upbuilding the home merchant marine and the laying of a broad basis for
+a national navy.[BF] These acts included decrees giving French ships the
+monopoly of trade to and from the colonies of France; imposing tonnage
+duties on foreign shipping; awarding direct premiums on French-built
+ships. England retaliated immediately. Holland remonstrated first, then
+made reprisals. For a time under Colbert's energetic administration of
+the finances and the marine, "prosperity grew apace. At the end of
+twelve years everything was flourishing."[BG] Then came the six years'
+war (1672-1678) with France and England combined against Holland, and at
+its end the French merchant marine lay sorely crippled.[BG]
+
+Still the fundamental principles of the stringent navigation laws long
+remained. A decree in 1681, and subsequent ordinances, defined what
+should constitute a French vessel; and corporal punishment was ordained
+against a captain for a second offence in navigating a vessel of alien
+ownership under the French flag.[BH] By later decrees, no alien was
+permitted to command a French vessel. An ordinance of 1727 further
+restricted alien command by shutting out even French subjects who had
+married aliens.[BH] It was required that every French vessel should be
+manned by a crew two-thirds of whom were French subjects.[BH] The system
+of regulations restricting the trade of the French colonies to French
+ships, and to the home market held till well into the nineteenth
+century.
+
+During the Revolution a decree (May, 1791) prohibited acquisition of all
+vessels of foreign build. In 1793 (Sept.) it was ordained that no
+foreign commodities, productions, or merchandise should be imported into
+France, or into any of her colonies or possessions, except directly in
+French ships, or in ships belonging to the inhabitants of the countries
+in which the articles imported were produced, or from the ordinary ports
+of sale or exportation. All officers and three-fourths of the crew were
+required to be natives of the country of which the foreign vessel bore
+the flag, under penalty of confiscation of vessel and cargo, and a fine
+enforcible under pain of imprisonment. A tonnage tax was levied on
+foreign ships alone.
+
+Despite this elaborate code designed for its benefit the domestic
+mercantile marine almost entirely disappeared during the wars of the
+Republic and the Empire; and after the Restoration its revival was so
+slow that for some time foreign ships were absolutely necessary for the
+supply of the French market.[BH] Still the underlying principles of the
+code were retained by the Restoration Government, modified in a few
+particulars. The modifications included the removal of the prohibition
+on indirect commerce--- the carrying trade between France and other
+countries:--yet advantage even in this commerce was held for the French
+flag through "flag surtaxes," added to the ordinary customs duties
+levied upon the merchandise imported into France in foreign bottoms,
+and by the tonnage charges.[BI] A law of March, 1822, renewed the
+prohibition against the importation of foreign-built ships.[BI]
+
+Early under Napoleon III movements toward the adoption of an economic
+policy similar to that then established in England were begun, and
+shortly a succession of radical changes in the maritime code were
+instituted.[BJ] In 1860 a commercial treaty with England was entered
+into. In 1861 freedom of access of foreign shipping to the French West
+Indies was permitted, subject to the payment of special duties varying
+according to the ports whence the goods were brought, or to which they
+were imported. Then at length, in 1866, numerous restrictions of the old
+code were swept away.[BJ] This law of 1866 (May) admitted duty-free all
+materials, raw or manufactured, including boilers and parts of engines
+necessary for the construction, rigging, and outfitting of iron or
+wooden ships; abolished a premium, or bounty, granted by a law of 1841
+(May) on all steam engines manufactured in France intended for
+international navigation; admitted to registration foreign-built and
+fully equipped ships upon the payment of two francs a ton; abolished all
+tonnage duties on foreign ships, except such as had been or might be
+levied for the improvement of certain commercial harbors; abolished the
+flag surtaxes; opened colonial navigation to foreign ships. The monopoly
+of the coasting trade alone was retained for French ships.[BK]
+
+Complaints against these new regulations were promptly raised by
+shipbuilders and ship-outfitters,[BK] and in 1870 a Parliamentary
+inquiry into their grievances was made. It appeared that shipbuilders,
+though enabled to import free such materials as they needed, were
+handicapped by numerous and extensive formalities; while the outfitters
+were embarrassed by special burdens which the law laid upon them, and
+which their British competitors did not have to bear.[BL] In 1872 laws
+were passed which reversed much of the act of 1866. A tax of from
+thirty to fifty francs a ton measurement was re-imposed on all foreign
+ships purchased for registration in France, together with a duty on
+marine engines; again a tonnage duty, of from fifty centimes to one
+franc, was imposed on ships of any flag coming from a foreign country or
+from the French colonies; and the provisions freeing materials for ship
+construction, and admitting foreign-built ships to French registration
+upon payment of the two-franc tax per ton, were repealed.[BM] In 1873 an
+extra-parliamentary commission took up the general question of the state
+of the commercial marine,[BN] and the outcome of this inquiry was the
+establishment of the system of direct bounties. This system was applied
+for the first time in the Merchant Marine Act passed in January, 1881.
+
+The act of 1881 granted both construction and navigation premiums, and
+was limited to ten years. The construction bounties, as was declared,
+were given "as compensation for the increased cost which the customs
+tariff imposed on shipbuilders" in consequence of the repeal of the law
+granting free import of materials by construction; the navigation
+bounties, "for the purpose of compensating the mercantile navy for the
+service it renders the country in the recruitment of the military navy."
+The construction bounties, on gross tonnage, were as follows: for wooden
+ships of less than 200 tons, ten francs a ton; of more than 200 tons,
+twenty francs; for composite ships, that is, ships with iron or steel
+beams and wooden sides, forty francs a ton; for iron or steel ships,
+sixty francs; for engines placed on steamers, and for boilers and other
+auxiliary apparatus, twelve francs per 100 kilograms; for renewing
+boilers, eight francs per 100 kilograms of new material used; for any
+modification of a ship increasing its tonnage, the above rates on the
+net increase of tonnage.[BO] The navigation bounties were confined to
+ships engaged in the foreign trade, and were to be reduced annually
+during the ten years' term of the law.[BP] They were thus fixed: for
+French-built ships, one franc and fifty centimes a registered ton for
+every thousand sea miles sailed the first year, the rate to diminish
+each succeeding year of the term seven francs and fifty centimes on
+wooden ships, and five centimes on iron and steel ships; for
+foreign-built ships owned by Frenchmen admitted to registry, one-half
+the above rates; for French-built steamers constructed according to
+plans of the Navy Department, an increase of fifteen per cent above the
+ordinary rate.[BQ]
+
+The first effect of this law was to stimulate the organization of a
+number of new steamship companies, and to occasion activity in various
+ship-yards, foreign (English) as well as home, in building steamships
+for their service.[BR] Most of the domestic-built iron and steam tonnage
+produced during the law's ten years' term was of steamers.[BS] The
+tonnage of steamships increased from 278,000 tons in 1880 to 500,000
+tons in 1890. Of this increase more than three-fifths were represented
+by vessels bought in other countries.[BT] The results of the navigation
+bounties are shown in official statistics covering the years 1882-1890.
+During this period iron or steel French-built ships earning these
+bounties increased from 159,714 tons to 190,831 tons, gross tonnage;
+while wooden or composite tonnage decreased from 150,233 tons to 57,068
+gross. Foreign-built iron or steel tonnage earning the bounties
+increased from 43,787 tons to 91,170 tons, gross; and wooden or
+composite tonnage increased from 1,220 tons to 9,799 tons, gross.[BS] In
+1891 the law which had then reached its limit of ten years was extended
+for two years. Doubting its renewal shipowners had sometime before
+ceased to increase their fleets.[BS]
+
+These results were variously pronounced unsatisfactory, and a revised or
+a new law was called for, with more and higher bounties. Owners of
+wooden sailing-ships were especially clamorous for larger benefits. They
+argued that sailing-ships being much slower than steamers should
+therefore receive higher mileage subsidies in order to compete on equal
+terms with steamships.[BU]
+
+A new law was enacted in 1893 (January 30). This act cut off bounties to
+foreign-built ships, and granted increased construction premiums. The
+construction subsidies were again declared to be given as "compensation
+for the charges imposed on shipbuilders by the customs tariff"; the
+navigation bounties, "by way of compensation for the burden imposed on
+the merchant marine as an instrument for recruiting the military
+marine." The construction subsidies were not to be definitely earned
+till the ships were registered as French; and by ships built in France
+for foreign mercantile fleets, not till they had been delivered. The
+navigation bounties were accorded to French-built ships, of more than 80
+tons for sailing-ships, and 100 tons gross for steamers, engaged in
+making long voyages and in international coasting; and were limited to
+ten years. They were based on gross tonnage per thousand sailed miles.
+To merchant steamships built in accordance with plans approved by the
+Navy Department, the rate of fifteen per cent above the regular
+navigation bounty provided in the law of 1881, was increased to
+twenty-five per cent. All ships receiving the navigation bounty were
+subject to impressment in case of war.[BV]
+
+The effect of this law appears to have been a division of the interests
+of shipowners and shipbuilders. The shipowners found the builders
+constantly increasing their prices until a point was reached where they
+were accused of absorbing both premiums for construction and navigation,
+by calculating the amount of bounty which proposed construction would
+demand, and adding that amount to their cost price.[BW] The increase of
+the bounty on sailing-ships was made in the expectation that it would
+check their falling off, which had been rapid since the development of
+steamship building; merchant sailing-ships were regarded as the best
+school for seamen, all of whom in French commerce, up to the age of
+forty-five, are subject at any time to draft into the national navy. It
+did this and more. There resulted the "strange phenomenon," as Professor
+Viallatés puts it, "of a steady increase in the sailing-fleet, while the
+number of steam-ships remained stationary."[BX]
+
+Thus, like its predecessor, unsatisfactory, the law of 1893 was
+succeeded by another act further enlarging the bounty system. This law
+was promulgated in 1902 (April 7). It provided three classes of bounty:
+construction and navigation as before, and "commission compensation" or
+"shipping premiums." The construction bounty remained as in previous
+law. The navigation bounty, now introduced as awarded "as a general
+compensation for the charges imposed on the merchant navy, and for the
+excessive cost of vessels built in France," was increased.[BY] It was
+payable to all French-built sea-going ships, steam and sailing, of over
+100 tons gross, and less than fifteen years old, and was limited to
+twelve years. To stimulate speed development, only ships showing a trial
+speed of at least twelve knots with half load were to receive the full
+navigation bounty; to those making less than twelve knots the bounty was
+diminished by five per cent; to those making less than eleven, by ten
+per cent. The shipping bounty was declared to be granted "as
+compensation for the charges imposed on the mercantile marine" by making
+merchant vessels practically schools for seamen. It was a "chartered
+allowance" made to foreign-built iron or steel steamers manned under the
+French flag for long voyages or for international coastwise trade, of
+more than 100 gross tons, belonging to French private persons or
+joint-stock or other companies, the latter having on their boards a
+majority of French citizens, and the chairman and managers being French.
+This allowance was reckoned on the gross tonnage, and per day while the
+steamer was in actual commission (three hundred days the maximum number
+in any one year).[BX] The rate varied according to the tonnage. Up to
+2000 tons gross, it was fixed at five centimes per ton; from 2000 to
+3000 tons, at four centimes; 3000 to 4000, three centimes; above 4000,
+two centimes; over 7000, the same grant as 7000. The creation of this
+"chartered allowance," as Professor Viallatés explains, was to prevent
+the navigation bounty from becoming to the same extent as under the
+previous law merely another form of bounty upon shipbuilding. It could
+so become, he points out, only to the extent of which it exceeded the
+owner's bounty.[BZ]
+
+Not all of the shipping and navigation bounties were to go to
+shipowners. Five per cent was to be retained for sailors' insurance
+"with a view to reducing the deductions imposed on them for the purpose
+of that insurance"; and six per cent to be reserved for distribution for
+the benefit of marines, as follows: "two-thirds to the provident fund,
+with a view to diminishing the deductions on mariners' pay and to
+increasing the funds for assisting the victims of shipwreck and other
+accidents, or their families; one-third to the invalids' fund, with a
+view to granting subventions to the chambers of commerce or public
+institutions for the creation and support of sailors' homes in French
+ports, intended to assist the nautical population, or of any other
+institutions likely to be of use to them, especially schools for
+seamen." The requirement in the old law of 1793 as to the composition of
+the crews of French merchant ships was modified, reducing the proportion
+of sailors who must be Frenchmen.
+
+French-built ships were privileged to chose between the shipping and the
+navigation bounties. To obtain the shipping bounty for the maximum of
+three hundred days steamers must make during the year a minimum of
+thirty-five thousand miles if engaged in the overseas trade, or
+twenty-five thousand if in "_cabotage international_."[CA] Shipowners
+agreeing to maintain on routes not served by the subsidized main
+steamers a regular line, performing a fixed minimum of journeys per
+year, with vessels of a certain age and tonnage, were permitted to
+claim, in lieu of the regular bounties, a fixed subsidy during the term
+of their agreement, equal to the average of the bounties to which the
+vessels in commission would be entitled for the whole of the journeys
+performed. The new tonnage to be admitted to the benefit of the law was
+limited to three hundred thousand gross tons of steamers and one hundred
+thousand gross tons of sailing-ships; of which new tonnage freight-built
+ships could form two-fifths. The appropriation for the payment of the
+bounties was also limited, to guard against a too heavy burden upon the
+national treasury. This was fixed at two hundred million francs: one
+hundred and fifty million for the shipping and navigation bounties and
+fifty million for the construction bounties.[CB]
+
+Unforeseen results of an unsatisfactory nature followed the application
+of this law. Professor Viallatés effectively states them in the fewest
+words:
+
+     "To be sure of profiting by the advantages of the law the
+     ship-owners hastened to order vessels and to place them on the
+     stocks. Their haste increased when it was seen that there existed
+     a considerable discrepancy between the allowed tonnage and the
+     money appropriated. The appropriation of one hundred and fifty
+     million francs, opened to assure the payment of the navigation
+     bounties and the compensation for outfit, was much too little.
+     The rush was such, as soon as this formidable mistake was
+     discovered, that, less than nine months after its promulgation,
+     from December 20, 1902, the useful effect of the law was
+     completely exhausted."!
+
+Thereupon resort was had to another Extra-Parliamentary commission to
+frame another system. The result was a law of 1906 (April), which
+separated the shipbuilder from the shipowner. The provisions for the
+construction bounty were redrawn with the object, as Professor Viallatés
+explains,[CC] "not only to equalize the customs duties affecting the
+materials employed, but also to give the builders a compensation
+sufficient to enable them to concede to the French shipowners the same
+prices as foreign builders." The rates were thus fixed on gross
+measurement: for iron and steel steamships, one hundred and forty-five
+francs per ton; for sailing-ships, ninety-five francs per ton: these
+bounties to decrease annually to four francs and fifty centimes for
+steamships and three francs ninety centimes for sailing-ships during the
+first ten years of the law's application, thereafter to stand at one
+hundred francs and sixty-five francs, respectively; for engines and
+auxiliary apparatus, twenty-seven francs fifty centimes per hundred
+kilograms. The navigation bounty to owners of French or foreign-built
+ships under the French flag, was calculated per day of actual running:
+for steamships, four centimes per ton gross up to 3000 tons; three
+centimes more up to 6000; two more to 6000 and above; for sailing-ships,
+three centimes per ton up to 500 tons, two more up to 1000, and one more
+to 1000 and above. This bounty to continue for the first twelve years of
+the law. The provisions for fostering speed development in steamships
+excluded from compensation those making on trial, half laden, less than
+nine knots, in place of ten in the previous law; reduced the rate to
+fifteen per cent of the bounty for those showing more than nine and less
+than ten knots; and increased this rate by ten per cent for those making
+at least fourteen knots, by twenty-five per cent for fifteen knots, and
+thirty per cent for sixteen knots. The extra bounty equal to twenty-five
+per cent of the regular navigation bounty to steamships constructed on
+plans approved by the Navy Department, and the provision making all
+merchant ships subject to requisition by the Government in case of war,
+were retained as in previous laws.[CD] This is the law at present in
+force.
+
+The total cost of the French bounty system in the twenty-four years from
+its establishment with the law of 1881 to 1904, when the law of 1902 had
+practically run out, was in round numbers upward of three hundred and
+eighty-one million francs. Professor Viallatés shows that the new law of
+1906 would absorb during the first seven years of its application,
+upward of eighty-four million francs.[CE]
+
+These construction and navigation bounties are exclusive of the
+subventions to steamships for carrying the mails. The establishment of
+the French postal ocean steamship subsidy system dates back to 1857,
+when a contract was made with the Union Maritime Company for a service
+to New York, Mexico, and the West Indies. The assertion is made by
+Professor Meeker that the French postal subventions paid "ostensibly
+for the furtherance of the mails," are "both greater in amount and more
+influential upon shipbuilding, navigation, and commerce than are the
+general premiums upon shipbuilding and navigation."[CF] Says Viallatés:
+
+     "The system is calculated to secure regular and rapid postal
+     communication with certain countries beyond seas, and at the same
+     time to constitute an auxiliary fleet capable of being utilized
+     by the navy in times of war. The existence of fixed lines with
+     constant service is also a means of favoring the expansion of the
+     national commerce. The State obtains, moreover, in exchange for
+     the subsidy, direct advantages; the free carriage of the mails
+     and the funds of the public treasury; transport of officials at a
+     reduced price, and of arms and stores destined for the service of
+     the State."
+
+Meeker:
+
+     "The greater part of the concealed subventions undoubtedly goes
+     to the shipbuilders, for all mail contract steamers must be built
+     in French yards and of French materials. These first costs are
+     estimated to be from twenty-five to fifty per cent greater in
+     France than in England."[CG]
+
+There is no competition in the letting of the French mail contracts.
+They go to four steamship concerns. For many years more than one half of
+the total steam tonnage of France has been owned by these four
+subsidized lines: the _Compagnie Générale Transatlantique_, the
+_Compagnie des Messagéries Maritimes_, the _Chargeurs Réunis_, and the
+_Compagnie Fraissant_.[CG]
+
+The great ship-yards have developed a capacity for building steamships
+of the largest class. The tonnage since 1881, when it had fallen to
+914,000 tons, had increased only to 1,052,193 tons in 1900. By 1910-11,
+it had reached 1,882,280 tons.[CH] The total mail subsidies average, in
+round numbers, five million dollars a year, while the construction and
+navigation bounties amount to three and a half million dollars
+additional.
+
+Practically every French vessel floating the French flag and engaged in
+foreign trade either receives or has received subsidies, or bounties,
+from the Government.[CI]
+
+FOOTNOTES:
+
+[Footnote BD: Meeker.]
+
+[Footnote BE: Lindsay, vol. III.]
+
+[Footnote BF: Rear-Admiral Alfred T. Mahan, "The Influence of Sea Power
+upon History," pp. 105-107.]
+
+[Footnote BG: Mahan, p. 73.]
+
+[Footnote BH: Lindsay, vol. III.]
+
+[Footnote BI: Prof. Achille Viallatés, "How France Protects Her Merchant
+Marine," in North American Review, vol. 184, 1907.]
+
+[Footnote BJ: Lindsay, vol. III.]
+
+[Footnote BK: Lindsay, vol. III, also Viallatés.]
+
+[Footnote BL: Viallatés.]
+
+[Footnote BM: Lindsay, vol. III, pp. 457-458.]
+
+[Footnote BN: Viallatés.]
+
+[Footnote BO: Meeker. Also Wells, pp. 163-164, _note_.]
+
+[Footnote BP: Wells, pp. 163-164, _note._]
+
+[Footnote BQ: Meeker. Also Wells.]
+
+[Footnote BR: Wells, p. 164.]
+
+[Footnote BS: Meeker.]
+
+[Footnote BT: Viallatés.]
+
+[Footnote BU: Meeker.]
+
+[Footnote BV: For this law see Meeker.]
+
+[Footnote BW: U.S. Consul Robert Skinner, Marseilles; Con. Repts., xol.
+XVIII (1900), p. 36.]
+
+[Footnote BX: Viallatés.]
+
+[Footnote BY: Meeker.]
+
+[Footnote BZ: North American Review, vol. CLXXXIV, 1907.]
+
+[Footnote CA: Embracing voyages within the limits of the ports of the
+Mediterranean, North Africa, and Europe below the Arctic
+circle--Meeker.]
+
+[Footnote CB: Meeker and Viallatés, summaries of this law.]
+
+[Footnote CC: North American Review, vol. CLXXXIV, 1907.]
+
+[Footnote CD: For this law see Senate Doc. no. 488, 59th Cong., 1st
+sess.]
+
+[Footnote CE: North American Review, vol. CLXXXIV, 1907.]
+
+[Footnote CF: Meeker.]
+
+[Footnote CG: Meeker.]
+
+[Footnote CH: Lloyd's Register, 1910-11.]
+
+[Footnote CI: Senate Rept., no. 10, 59th, Cong., 1st sess.]
+
+
+
+
+CHAPTER IV
+
+GERMANY
+
+
+Germany was a close follower of France in the adoption of the direct
+ship bounty system. Only two months after the promulgation of the
+initial French law of 1881, Bismarck brought the question before the
+Reichstag, with an exhibit of this act. In an elaborate memorial (April
+6, 1881) he reviewed the general subject of State bounties and subsidies
+to shipping in various maritime countries, and closed with this pointed
+declaration: "It is deserving of serious consideration whether, under
+the circumstances as given, German shipping and German commerce can
+hope" for further prosperous developments as against the competition of
+other nations aided by public funds and assistance.[CJ]
+
+At this time the German marine was represented by a substantial fleet of
+merchant steamships, but all were foreign-built, mostly from British
+ship-yards. The Government was paying only a postal subsidy of about
+forty-seven thousand dollars--a sum in proportion to the weight of the
+parcels forwarded--in the overseas trade to the participating German
+steam lines. A first step had been taken indirectly in favor of domestic
+shipbuilding six years earlier (1879), when Bismarck, in introducing the
+general protective system, exempted this industry, and free entry was
+permitted to German ship-yards of materials used in the construction and
+equipment of merchant as well as of war-ships, which then were only on
+the domestic stocks.[CK] Bismarck's proposal of 1881, to meet French
+subsidies with German subsidies, was avowedly with the single object of
+promoting with State aid a German mercantile marine.
+
+The project was brought before the Reichstag early in 1884 and warmly
+discussed. Earnest protests were raised against it by shipping merchants
+of the chief German seaports;[CL] while earnest support came from other
+merchants and varied interests. The initial proposal was for the
+establishment of a subsidized mail service by German steamships. It
+contemplated an annual subsidy of four million marks, with fifteen
+years' contracts, for such service between Germany and Australia and
+East Asia. The measure was defeated in the Reichstag that year. Brought
+forward the next year (1885), and in a new form, it was finally enacted
+in April and went into effect the following July.
+
+This law increased the annual subsidy from four million marks as first
+proposed to four million four hundred thousand marks, of which one
+million seven hundred thousand was offered for the East Asian line, to
+China and Japan; two million three hundred thousand for the Australian
+line, and four hundred thousand for a branch line connecting Trieste
+with the Australian line at Alexandria. The contracts in accordance with
+it all went to the North German Lloyd Company, of Bremen. The convention
+between the Government and this company required that the new vessels to
+be furnished must be built in German yards and of German material. The
+coal supply was, as far as practicable, to be of German product. The
+chancellor was empowered to take over all the company's steamers for the
+mobilization of the navy, at their full value, or on hire at proper
+compensation. The sale or loan of a steamer to a foreign power could be
+made only by permission of the chancellor. The number of voyages to be
+made on each line yearly, and the rate of speed, were set down in
+careful detail. Failure to observe the table of voyages, without
+sufficient reason, subjected the company to heavy penalties. All persons
+employed in connection with the mail service were, if practicable, to be
+German subjects. All officers in the service of the empire, relief
+crews, weapons, ammunition, equipments, or supplies for the imperial
+navy, were to be carried at twenty per cent under the regular
+tariff.[CM]
+
+Subsequent laws made additions to the free list of raw and manufactured
+shipbuilding material; and preferential rates on the State railroads
+were arranged for the transportation of steel, iron, timber, from the
+interior, where these are found at an average distance of some four
+hundred miles from the coast, to the ship-yards.[CN] Speedily large and
+superior steamships were designed and turned out from the enlarged
+ship-yards, the first ocean flyer being the _Auguste Victoria_ for the
+Hamburg-American Line. In 1890 a subsidy of ninety thousand marks
+annually was granted for an East African line on a ten-years' contract.
+Within less than six years the establishment of a fortnightly Asiatic
+service was agitated; and in 1896 a bill granting a yearly subsidy of
+one million four hundred thousand marks therefor, was brought before the
+Reichstag. If this were forthcoming the North German Lloyd agreed,
+besides furnishing the fortnightly service, to increase the speed of
+their steamers, to send ships direct to Japan, and to meet all
+requirements of the Admiralty with respect to ships and crews.[CO]
+
+Now the advocates of further subsidies maintained that the policy
+instituted with the law of 1885 had proved its effectiveness. The
+indirect advantages from the subventions were claimed to be quite as
+great as the direct. While before 1885 all large ships for German
+companies had been ordered in England, now all large ships for the
+German transatlantic lines were built in Germany.[CO] This condition,
+the increasing activity in domestic shipbuilding, and the steady growth
+of the empire's commercial marine, were presented as conclusive evidence
+of the law's effect. Germany was now pressing into sharp rivalry with
+England, and turning out larger and speedier steamships.[CP] The
+increased subsidy for the China service was especially urged upon these
+grounds: the importance of placing the German mail service in the East
+on a par with the services of England and France, the benefits to
+commerce, and the aid of the national defence.[CQ]
+
+The measure met opposition at the session in which it was first
+introduced; but at the next session (1898), after amendment, it became
+law. By this act the subsidy was fixed at one million and a half marks a
+year for the extension of the East Asiatic service to China direct, and
+for making the whole service fortnightly; and the contract was extended
+for another fifteen years. It was conditioned that if foreign competing
+lines should increase the speed of their ships the North German Lloyd
+must do likewise, and without additional subsidy, unless the foreign
+companies should receive extra payments.[CR]
+
+The total annual subventions for the Asiatic and Australian service had
+now reached five million five hundred and ninety thousand marks
+($1,330,420). After January, 1899, under a contract between the North
+German Lloyd and the Hamburg-American Line then made, a part of this
+subsidy went to the latter. In 1901 the subvention to the East African
+line was increased to one million three hundred and fifty thousand
+marks. Thus Germany's grand total of annual payments in postal
+subventions had reached six million nine hundred and forty thousand
+marks.
+
+Besides these postal subventions and the free entry to materials used in
+ship-construction and equipment, and the preferential railway rates on
+long hauls of the heavy domestic materials, barely covering the cost of
+handling and transportation,[CS] the Government bestows a special form
+of indirect bounty upon the subsidized steamship lines in the shape of
+largely reduced through freight rates. These include substantial
+reductions on merchandise exported from inland Germany to East Africa
+and the Levant. Thus the combined land and sea through rates are brought
+considerably below those in force on goods sent to German ports for
+direct importation.[CT]
+
+Under these and other favoring conditions the German merchant marine has
+advanced in total tonnage from an insignificant place in 1880 to the
+third in rank among the maritime nations in 1911. Between 1885 and
+1900, a period of only fifteen years, its growth was tenfold.[CU] In
+1890 the gross tonnage stood at 928,911 tons: in 1900 it had reached a
+total of 2,159,919 tons. Steamers and sailing-ships were nearly equal in
+tonnage. German-built steamships had won the speed record in ocean
+liners. Thereafter the output of steamships became much the larger, and
+in 1906 the Government was taking measures to revive the sailing-ship
+trade, because of its value as a training-school for seamen for the
+navy.[CV] In 1910-11 the total tonnage was recorded at 4,333,186
+tons.[CW]
+
+The other influences contributing to this extraordinary growth are
+variously stated according to the observer's point of view. The United
+States consul at Hamburg sees them in the "rapid transformation of the
+country from a non-producing nation into one of the foremost industrial
+powers of Europe, a large available supply of excellent and cheap labor,
+and the geographical situation of the empire."[CX] The historian of
+Modern Germany sees them in German business methods:
+
+     "The astonishing success of the German shipbuilding industry is
+     due partly to its excellent management and organization; partly
+     to the application of science and experience to industry; * * *
+     partly to the harmonious co-ordination and co-operation of the
+     various economic factors which in more individualistic countries,
+     such as Great Britain, are not co-ordinated, and often serve
+     rather to obstruct and to retard progress by unnecessary friction
+     than to provide it by harmonious action."[CY]
+
+FOOTNOTES:
+
+[Footnote CJ: For this Memorial see U.S. Con. Rept., no. 112, Jan.,
+1890, pp. 108-118.]
+
+[Footnote CK: J. Ellis Barker, "Modern Germany," 3rd edition, 1909.]
+
+[Footnote CL: Wells, p. 166.]
+
+[Footnote CM: U.S. Con. Rept., no. 61, 1886, pp. 285-287.]
+
+[Footnote CN: Barker, 3rd ed.]
+
+[Footnote CO: Meeker.]
+
+[Footnote CP: U.S. Con. Repts., 1889, no. 101, p. 544.]
+
+[Footnote CQ: Meeker. Also German report on the operation of the law of
+1885, in report of (U.S.) commissioner of navigation for 1898.]
+
+[Footnote CR: Meeker. Also German report on the operating of the law of
+1885, in report of commission of navigation for 1898.]
+
+[Footnote CS: Barker, 3rd ed.]
+
+[Footnote CT: Meeker.]
+
+[Footnote CU: Barker, 3rd ed.]
+
+[Footnote CV: U.S. Con. Rept, no. 13, July, 1906, pp. 87-89.]
+
+[Footnote CW: Lloyd's Register, 1910-11.]
+
+[Footnote CX: U.S. Consul General Robert P. Skinner, Hamburg, in Daily
+Con. Repts., April 8, 1911, no. 82.]
+
+[Footnote CY: Barker, Modern Germany, p. 490.]
+
+
+
+
+CHAPTER V
+
+HOLLAND--BELGIUM
+
+
+The home Government of the Netherlands gives neither construction nor
+navigation bounties. Only subventions to steamship lines for carrying
+the mails are granted. The single purpose of these subventions is
+declared to be to secure the prompt and effective furtherance of the
+mails at reasonable cost.[CZ] The contracts are not publicly let, but go
+to the several steamship lines plying to foreign ports and to the Dutch
+colonies. The amounts fixed by contract are at a given rate per voyage.
+The cost of the subventions to the Dutch East Indian lines is divided
+equally between the home and colonial Governments. Independently of the
+home Government the Dutch East Indian Government grants general mileage
+subventions for the maintenance of lines making regular communication
+with the various ports of the East Indies.[CZ] Holland's gross tonnage
+in 1910 had reached the respectable total of 1,015,193 tons,[DA] ranking
+her eighth among the maritime nations.
+
+       *       *       *       *       *
+
+Belgium had a subsidy system for shipbuilding before 1852. At present
+neither bounties to domestic shipping nor postal subventions are paid by
+the Government. Subsidies, or premiums, however, are given to certain
+foreign steamship lines to encourage the commerce of Antwerp. These
+include an annual payment of eighty thousand francs ($15,440), and the
+refunding of lighterage and pilotage dues, to the North German Lloyd on
+their East Asiatic and Australian lines; and fifteen hundred francs
+($289.50) to the German-Australian line for each call to and from
+Australia, the maximum subvention limited to thirty-nine thousand francs
+($7527). A Danish steamship concern is also exempted from lighterage
+and harbor dues and granted other facilities, but receives no money
+premiums.[DB] Belgium tonnage in 1910 comprised only 165 steam and
+sailing ships for a total of 299,638 tons.[DC]
+
+FOOTNOTES:
+
+[Footnote CZ: Meeker.]
+
+[Footnote DA: Lloyd's Register, 1910-11.]
+
+[Footnote DB: Meeker.]
+
+[Footnote DC: Lloyd's Register, 1910-11.]
+
+
+
+
+CHAPTER VI
+
+AUSTRIA-HUNGARY
+
+
+The Imperial Government of Austria-Hungary spurred by the action of
+Germany, instituted a direct subsidy system, also modelled after that of
+France, in 1893, when the Austrian merchant marine was languishing.[DD]
+
+A postal subsidy had long been in operation, the subsidies being all
+awarded to a single steamship company--the Austrian Lloyd, earlier the
+Austro-Hungarian Lloyd. They were practically mileage and speed
+bounties,[DE] increasing with the extension of service. Ten-years'
+contracts were at first made with this company. The contracts, executed
+in 1888, particularly guarded domestic interests. In the purchase of
+materials it was required that preference be given to Austro-Hungarian
+industries. The coal used must be bought from Austro-Hungarian subjects
+in the proportion of two tons from Austria and one ton from Hungary,
+provided that "the price is not greater than foreign coal, and that the
+steam-producing power of the native coal is equal to at least
+eighty-four per cent of that of foreign coal." In the building and
+repairing of their ships, or parts of ships, and engines, the company
+must also favor home interests. Ships, engines, or boilers could be
+ordered abroad only with the consent of the foreign office when shown
+that the work cannot be made in Austria within proper time, or that the
+want can be supplied by a foreign country on more favorable terms.[DF]
+
+By a law of July, 1891, the rates for mail-contract steamships were
+fixed as follows: for fast lines, making above ten knots, a maximum rate
+of seventy kreutzers per nautical mile; for slower lines, fifty
+kreutzers a mile. The total amount of mileage bounty payable each year
+was limited to two million nine hundred and ten thousand florins. But
+in addition to this bounty the Government agreed to pay the Suez Canal
+tolls. To encourage the Austrian Lloyd to build larger and swifter
+vessels the Government further agreed to advance the company one million
+and a half florins. This was to be furnished in three equal payments
+yearly (1891, 1892, 1893), and was to be repaid in five equal payments
+of three hundred thousand florins each, beginning in January, 1902. The
+company's ships were to be exempted from consular fees, "the same as
+vessels of the imperial navy"; and were to be at the disposal of the
+naval and military departments in case of war. All the officials of the
+company were to be Austrian subjects, "naval officers either active or
+retired to be given the preference"; and there was to be an
+administrative committee of eight members, the president appointed by
+the Emperor and two other members by the ministry of commerce, the
+intention of this provision being to give the Government control over
+the company's affairs.[DG]
+
+The general subsidy law of 1893 (November 28) was the outcome of the
+deliberations of a special Parliamentary committee appointed that year;
+and its declared object, as set forth in this committee's report, was
+"to put a stop to the decline of our merchant fleet, to allow it to cope
+with foreign competition, and to secure for the inhabitants of our coast
+needed employment and profits in maritime pursuits."[DG] Three years
+before (1890), with the same object in view, a preliminary step had been
+taken in the exemption of all iron and steel steam and sailing ships
+from trading and income taxes while engaged in ocean voyages.[DG]
+
+The law provided two classes of subsidies--a trade bounty and a
+navigation bounty. They were to go to all steamers and sailing-ships
+engaged in the deepseas trade or long-coasting trade, and not receiving
+mail subventions. At this time a large percentage of the Austrian steam
+tonnage was receiving the postal subsidies, and most of this tonnage was
+owned by the Austrian Lloyd Company.[DG] The trade bounty was for ships
+making long voyages; the navigation bounty for those engaged in
+coastwise voyaging. Ships entitled to the trade bounty were required to
+be owned at least two-thirds by Austrian subjects, to be not over
+fifteen years old, and registered A1 or A2. The rates were thus fixed:
+for the first year after launching, iron or steel steamers, six florins
+($2.44) per ton, iron or steel sailing-ships, four florins and fifty
+kreutzers; wooden or composite (part iron) sailing-ships, three florins.
+After the first year the rate was to be reduced five per cent annually
+till the end of the fifteenth year. As an inducement to employ home work
+and to utilize home materials, the bounty was to be increased by ten per
+cent for iron or steel sailing-ships built in the Austrian ship-yards,
+and by twenty-five per cent if at least one-half of the materials used
+in the construction were of Austrian origin. If more than one year had
+elapsed since the launching of a ship otherwise entitled to a bounty, a
+deduction of fifteen per cent was to be made for each year that had
+passed. The navigation bounty was fixed at five kreutzers per net ton of
+capacity for every hundred nautical miles sailed. The exemption from the
+production and income taxes, granted in 1890, was extended for a term of
+five years from January 1, 1894. The law was to be in force for ten
+years.
+
+As the end of the term of this law was approaching ship-owners began
+agitating for its renewal with an increase in the subsidy. Since its
+enactment the production of steam tonnage had been accelerated, and the
+decline of sail tonnage had been checked; but no marked change in the
+merchant marine generally had been manifest.[DH] Of the bounties paid
+the Austrian Lloyd had received a large share in behalf of their ships
+which were not directly under contract for the mail service. The
+remainder went to the various companies controlling the coast and river
+trade. The ten to twenty-five per cent addition to the trade bounty for
+ships built in domestic yards and from domestic materials, finally went
+for the most part to a single large building concern at Trieste. While
+most of the Austrian tonnage was yet of foreign build, mostly
+constructed in British yards, the increase in the proportion of domestic
+build was considerable after 1893. The greater part of the materials
+used was Austrian product. Consequently allied industries increased with
+this increased output of home ships.[DI]
+
+At length in 1907 (February 23) a new law was enacted increasing the
+navigation and construction bounties. For the navigation subsidies, to
+go to shipowners according to the tonnage of the ships and the number of
+miles run, allotments were thus made: for the first year, $852,600; for
+1908, $893,200; 1909, $954,100; 1910, $1,015,000; 1911, $1,075,000; and
+for the five years remaining of the term, of the law--which ends
+December 31, 1916--$1,136,800 a year. The construction subsidies were
+raised as follows: for ships launched after July 1, 1907: steamers built
+of iron and steel $8.12 per gross ton, sailing-ships of iron and steel,
+$2.84; for marine engines, boilers, pipes, and auxiliary apparatus,
+$1.62 per 220.46 pounds. To entitle a ship to these bounties fifty per
+cent of the materials used in its construction must be home product.[DJ]
+
+This year (1907) also the annual postal subventions to the Austrian
+Lloyd were increased $1,486,586, for a further period of fifteen years.
+This contract called for an increase of speed to the Levant and the
+Orient. The Suez Canal tolls were to be paid by the Government as
+before.
+
+       *       *       *       *       *
+
+The Kingdom of Hungary grants bounties to Hungarian ships, or ships
+owned in greater part by Hungarian subjects, independently of the
+Imperial Government. Her first general bounty law was also enacted in
+1893 and was limited to ten years. The subsidies granted were of two
+classes--premium on purchase, and a mileage bounty. The purchase subsidy
+was based on net tonnage and was payable for a term of fifteen years
+from the date of the ship's launching, reduced each succeeding year by
+seven per cent; the mileage subsidy, for the same term, was in
+proportion to the length of the voyages made "in the interest of
+national commerce whether to or from Hungarian ports." The premiums on
+purchase were thus fixed for the first year: for vessels employed in
+long-distance coasting trade--sailing-ships, six krone (each 20 cents);
+steamers, nine krone per ton; employed in deep-sea trade,--sailing-ships,
+nine krone; steamers, twelve krone per ton. Iron or steel ships rated
+first class were entitled to these bounties. The mileage subsidy was
+fixed at five hellers per ton, per hundred nautical miles run. It was
+offered only for voyages "to places where no company in receipt of
+State subsidies is obliged to maintain regular communications;" and
+it was not to be given for "petty coasting trade."[DK]
+
+This law was succeeded by an act of 1895 granting construction bounties,
+with the intent of fostering domestic shipping and the use of domestic
+material. The rates were proportioned according to the amount of foreign
+or domestic material used, construction with domestic product receiving
+the highest bounty. These rates were: for iron or steel hulls, thirty to
+sixty krone per ton; for wooden ships, ten to twenty-five krone per ton;
+for engines and auxiliary machinery, ten to fifteen krone per ton of
+materials used; for boilers and pipes, six to ten krone per ton of
+material. The total amount to be paid out yearly was limited to the
+modest figure of two hundred thousand krone ($40,600).[DL]
+
+The law of 1895 in reality was not effective, for ships of the Hungarian
+merchant marine continued to be built in foreign parts--mainly in
+British yards;[DK] and while the carrying capacity had considerably
+increased, the tonnage had continued to decline.[DK] By 1904 the
+situation had become so unsatisfactory that, as the American consul at
+Budapest wrote, the passing of a new navigation-development law by
+Hungary's Parliament had, it was believed, become a pressing
+necessity.[DM]
+
+       *       *       *       *       *
+
+In 1909 the Austrian Government guaranteed a maximum sum of one million
+crowns (approximating $200,000) annually to the Austro-American Shipping
+Company for their service between Trieste and Brazil and Argentine
+ports. Should the service tend successfully to promote home industries
+and agriculture, this subsidy was to be increased, the amount of
+increase to depend upon the amount of cargo carried in excess of a
+certain minimum. The contract was to run for fifteen years from January
+1, 1910. The service, beginning with sailings three times a month, was
+to become weekly on January 1, 1911.[DN]
+
+The total Austria-Hungary tonnage in 1910-11 was recorded at 779,029
+tons.[DO]
+
+FOOTNOTES:
+
+[Footnote DD: Meeker.]
+
+[Footnote DE: U.S. Con. Rept., Jan., 1890, no. 112, p. 95-96.]
+
+[Footnote DF: U.S. Con. Repts., vol. XXXII, 1890, no. 112, pp. 23-24.]
+
+[Footnote DG: Meeker.]
+
+[Footnote DH: U.S. Con. Rept., no. 282, March, 1904, pp. 645-646.]
+
+[Footnote DI: Meeker.]
+
+[Footnote DJ: U.S. Con. Rept., no. 320, July, 1907, p. 180.]
+
+[Footnote DK: Meeker.]
+
+[Footnote DL: Meeker. Also Parl. papers, Com., 1909, no. 4, p. 8.]
+
+[Footnote DM: U.S. Con. Rept., no. 283, April, 1904, p. 304.]
+
+[Footnote DN: U.S. Con. Rept., no. 352, Jan., 1910, p. 45.]
+
+[Footnote DO: Lloyd's Register, 1910-11.]
+
+
+
+
+CHAPTER VII
+
+ITALY
+
+
+Early after its establishment in 1861 the Kingdom of Italy adopted a
+subsidy system with the object of reviving and upbuilding the then
+languishing Italian merchant marine. This policy was instituted in 1866
+with the grant of premiums on the construction of wooden ships. At the
+same time materials used in the construction, repair, or enlargement of
+ships were made duty-free.[DP]
+
+For a while under these conditions, before iron ships had come much into
+use, the merchant marine prospered. Then it again began to languish; and
+in 1881 the promulgation of the French general bounty law was made the
+special occasion for considering the adoption of a similar measure.[DQ]
+The draft of a bill modelled after that law was promptly introduced in
+the Chamber of Deputies, in February. But with its consideration such
+perplexities arose that at length the whole subject was referred to a
+commission of inquiry, to investigate and report a more satisfactory
+one. The result of this inquiry was a bill which became law December 6,
+1885, to continue in force for ten years.
+
+This law provided for general construction subsidies, on the following
+scale: for steamers and sailing-ships built of iron or steel, sixty lire
+($11.58) per gross ton; for steam or sailing ships built of wood,
+fifteen lire; for _galleggianti_ (floating material: the term signifying
+merchant ships navigating the Italian seaboard, rivers, and lakes, but
+not provided with certificates of nationality), of iron or steel, thirty
+lire; for construction and repairs of marine engines, ten lire per
+quintal; for marine boilers, six lire per hundred kilograms of weight.
+These bounties were to be increased from 10 to 20 per cent (according to
+the degree of speed and other desirable qualities shown) for steamers
+built on plans approved by the Government engineers as to be
+convertible into cruisers, showing a speed of not less than fourteen
+knots an hour, and with sufficient coal-carrying space to steam four
+thousand miles at ten knots. The law was applicable to ships bought
+abroad as well as those of domestic build. But it forbade the sale or
+charter to a foreigner of any steamer upon which the bounty had been
+paid, except by Government permission. The laws of 1866 granting
+premiums and free entry to shipbuilding materials were suspended during
+the ten years' term of this act.[DR]
+
+In 1888, a new tariff of the previous year (July, 1887) having increased
+the customs duties on shipbuilding materials, additional bounties on
+construction and repair were granted by a royal decree to offset these
+disadvantages to the shipbuilders. A provision was added for the payment
+of fifty lire per gross ton for construction of war-ships, and eight and
+a half-lire per horsepower for engines, nine and a half lire per quintal
+for boilers, and eleven lire per quintal for other apparatus, to be used
+in war-ships. Navigation bounties were also added to Italian ships as
+follows: 0.65 lire per gross ton for every thousand sea miles run beyond
+the Suez Canal or the Strait of Gibraltar to or from ports outside of
+Europe; the same for ships sailing between one continent with its
+adjacent islands and another continent with its adjacent islands,
+outside the Mediterranean. Sailing-ships of above fifteen years of age
+were ineligible to these bounties; so also were mail-route steamers.[DS]
+
+In 1896, after the expiration of this law, a new law was enacted (July
+23) closely modelled upon it. The construction subsidies were the same,
+except that war-ships built for foreign countries were debarred from
+receiving bounties. The navigation subsidy per gross ton for every
+thousand sea miles sailed beyond the Suez Canal and the Strait of
+Gibraltar was increased to 0.80 lire, the rate to be diminished by ten
+centimes for steamers and fifteen centimes for sailing-ships every three
+years. An important addition was the reënactment of the customs rebates
+on shipbuilding materials. This law was also to be in force ten
+years.[DS]
+
+In 1900 (November 16) a royal decree was issued modifying the law of
+1896 in several particulars. No bounty was hereafter to be allowed to
+vessels built in Italian yards for foreigners. The customs drawbacks
+were abrogated, and in place of them was granted a bounty of five lire
+per quintal of metal used in repairs. A bounty of fifty-five lire per
+gross ton was offered for iron or steel steamers showing a speed of
+above fifteen knots; fifty lire, for steamers speeding twelve to fifteen
+knots; forty-five lire, for steamers or sailing-ships with speed below
+twelve knots; and thirteen lire per net ton for modern hulls. The
+navigation subsidies per gross ton per thousand miles, were thus fixed:
+for steamers, forty centimes up to the fifteenth year after
+construction; for sailing-ships, twenty centimes up to the twenty-first
+year after construction. The yearly distances run for which the bounties
+were to be paid were limited to thirty-two thousand miles for a steamer
+below twelve knots; forty thousand for one of twelve to fifteen knots;
+fifty thousand above fifteen knots, and ten thousand for a sailing-ship.
+All Italian ships were eligible to this bounty; foreign ships were
+debarred. The maximum expenditure for all the bounties was limited to
+ten million lire ($2,000,000) a year.
+
+In 1910 (May) a new subsidy bill was enacted providing for the
+continuance of the arrangement under the measure of 1900, with a few
+immaterial modifications.[DT] Early in 1911 the Government was reported
+to have in readiness ten bills looking to the support of domestic
+shipping and shipbuilding. Eight of these had relation to the increase
+of subsidy on the Italian mail and cargo service of the Mediterranean.
+Other routes subsidized included lines to Central America, Chile,
+Canada. Domestic shipbuilding was to be aided to the extent of twelve
+hundred and forty thousand dollars.[DU]
+
+Italy's mail subvention system dates from 1877, when the Italian
+steamship companies by a convention (July 15) consolidated with the
+Government.[DV] All the lines receiving the mail subsidy came to be
+owned by a single powerful corporation, the Italian General Navigation
+Company. While the rates paid per mile are not so high as those paid by
+several other countries, the requirements as to size of vessels, speed,
+and amount of service to be rendered, are less exacting. Accordingly
+these subventions are in fact, as Professor Meeker recognizes them,
+"partly in the nature of concealed bounties." In 1879 the Government
+spent in these subventions a total equalling $1,593,214. By 1889 the
+total had only slightly increased, the amount that year being
+$1,849,392. In 1908 the total was $2,328,917. The mail steamships are
+required to carry government civil and military employees at half price.
+
+Previous to 1896 the Italian General Navigation Company owned more than
+half of the Italian steam tonnage, and most of the large steamships.[DW]
+After 1896 the sail tonnage steadily increased. In 1905 it was recorded
+that "the Italian flag now flies over some of the best modern
+transatlantic liners in the port of New York; the Mediterranean is full
+of Italian ships; and the Lloyd Italiano has five new ten-thousand-ton
+steamers nearly ready for service in South America."[DX] Between 1890
+and 1910 the Italian gross tonnage increased from 809,598 tons to
+1,320,653 tons.[DY]
+
+FOOTNOTES:
+
+[Footnote DP: Meeker.]
+
+[Footnote DQ: Bismarck's Memorial to the German Reichstag, April, 1881.]
+
+[Footnote DR: U.S. Con. Rept., Jan., 1890, no. 112, pp. 61-62. Also
+Meeker.]
+
+[Footnote DS: Meeker.]
+
+[Footnote DT: U.S. Consul J. K. Wood, Venice, in Daily Con. Repts., no.
+30, Aug 9, 1910.]
+
+[Footnote DU: U.S. Consul T. St. J. Gaffney, Dresden, Germany, in Daily
+Con. Repts., no. 83, April 10, 1911.]
+
+[Footnote DV: Meeker.]
+
+[Footnote DW: Meeker.]
+
+[Footnote DX: U.S. Senate Rept., no. 10, 59th Cong., 1st sess.]
+
+[Footnote DY: Lloyd's Register, 1910-11.]
+
+
+
+
+CHAPTER VIII
+
+SPAIN--PORTUGAL
+
+
+Spain instituted a ship-construction bounty system in 1880, when her
+merchant marine was languishing, and in 1886 a comprehensive system of
+mail subventions, contracting for the whole ocean service with a single
+steamship company, _La Compañia Transatlantica Española_.
+
+Previous to 1886, for a quarter of a century and more, postal
+subventions had been given to private commercial houses, or individuals,
+providing steam communication with the Spanish colonies and foreign
+ports; but much of the service during that period had been performed by
+this company through cessions from the holders of the contracts. Before
+the adoption of the private contract system, the service to the colonies
+had been performed by the first regular steamship line between the
+Peninsula and the Antilles (in 1850), established at the State's
+expense. The ships of this line were all under the command of officers
+of the navy, and performed various services for the Government besides
+carrying the mails and despatches.
+
+Under the contract of 1886 (ratified by the Cortes in 1887) the company
+were to furnish all the mail steam communication between the Peninsula
+and the colonies and possessions, and foreign ports, for a total maximum
+subvention of 8,445,222 pesetas ($1,689,044) annually. The subsidy was
+calculated on the number of nautical miles run. The total sum was
+distributed among the budgets for the Peninsula and the several
+colonies.[DZ] In 1909 the subvention was redistributed over the various
+lines, the total amounting in round numbers to $1,665,600. The contract
+went as a whole also to the Spanish Transatlantic Company, to run for
+twenty years. A particular requirement was that the company must favor
+Spanish trade in every possible way.[EA]
+
+The first construction subsidy law, that of 1880 (June 25), granted a
+bounty of forty francs ($7.72) per measured ton of 2.83 cubic metres on
+all ships built in Spain. All tariff duties paid on imported materials
+for building, careening, or repairing ships or their machinery, were to
+be refunded by the Government.[EB]
+
+During the decade between 1880 and 1890 the Spanish marine slowly
+increased. Further to foster it, in 1895 a more general subsidy law was
+enacted. This act granted a construction subsidy of forty pesetas
+($7.72) per gross ton for wooden ships; seventy-five pesetas ($14.48),
+for iron and steel steamers; and fifty-five pesetas ($10.62), for ships
+of mixed construction and for sailing-ships of iron and steel.[EC]
+
+The year following the passage of this law was marked by rapid expansion
+in the national marine. Then came a more rapid decline. This was due, it
+is assumed, to increased taxes, and business depression occasioned by
+the colonial wars, involving enlarged Government expenditures and the
+cutting off of much colonial trade.[EC] During the war with the United
+States (1898) Spain lost eighteen large steamers of 31,316 tons. After
+that war, with the development of her national resources, the Spanish
+marine again began rapidly to grow.[EC]
+
+In 1909 (law of June 14) the system was extended with the addition of
+general navigation bounties calling for an annual expenditure of
+2,750,000 pesetas ($530,750). For ships making monthly sailings to
+various named points, among them Brazil, Uruguay, and the Argentines,
+and semi-weekly sailings to Algeria, bounties were provided ranging from
+seven to seventeen cents per ton gross for every thousand miles run, to
+continue for a period of ten years. Spanish ships manned by Spanish
+crews and ranked by maritime agencies as first class were made eligible
+to them. All ships receiving these bounties must admit naval cadets and
+perform certain services for the Government. To shipbuilders, as off-set
+to the duties on imported materials which they must pay, bounties for
+port materials as well as for ships were granted by this law. The
+construction subsidies were increased to $13.84 per gross ton for wooden
+ships not possessing their own motor power, and $17.30 self-propelling;
+$20.76 for iron or steel ships without motor, $27.68 for ships for
+freight only, $29.41, freight and passengers; and $32 passengers only.
+Ten per cent of the bounties for passenger ships was to be added for
+each knot made above fourteen per hour. The sale of a ship to a
+foreigner within two years after the ship's construction was made
+invalid unless about a third of the bounty received be repaid. Ships
+built abroad for Spanish citizens were to be relieved of certain duties
+"provided it appears that it was absolutely necessary that they be built
+abroad."[ED]
+
+The total amount paid in mail subventions in 1910 was $1,858,186; in
+navigation subsidies, $1,291,826. The total Spanish tonnage the same
+year comprised 579 vessels of 765,460 tons.[EE]
+
+       *       *       *       *       *
+
+Portugal grants postal subventions of comparatively small amounts to
+three steamship companies which perform all her mail carrying. A move
+toward the institution of a general subsidy system was made in 1899,
+when a bill was before the Cortes providing construction and navigation
+bounties for the encouragement of domestic shipbuilding and ship-using;
+but this measure was not enacted. In 1911 the republic offered a subsidy
+of one thousand dollars per voyage in either direction for steamship
+service between Lisbon and New York, with call at the Azores, the
+contract to run for three years.[EF] Portugal controls her shipping
+service with her colonies, the trade with them being restricted to the
+Portuguese flag.[EG] Her total tonnage is small: in 1910 only 110,183
+tons.[EH]
+
+FOOTNOTES:
+
+[Footnote DZ: U.S. Con. Rept., no. 112, January, 1890, pp. 54-56.]
+
+[Footnote EA: U.S. Vice Con. Gen. William Dawson jr., Con. Repts., no.
+349, Oct., 1910.]
+
+[Footnote EB: U.S. Con. Repts., 1890.]
+
+[Footnote EC: Meeker.]
+
+[Footnote ED: U.S. Con. Rept., no. 349, Oct., 1909.]
+
+[Footnote EE: Lloyd's Register, 1910-11.]
+
+[Footnote EF: Daily Con. Repts., no. 106, May 1, 1911.]
+
+[Footnote EG: Meeker. Also Parliamentary papers.]
+
+[Footnote EH: Lloyd's Register, 1910-11.]
+
+
+
+
+CHAPTER IX
+
+DENMARK--NORWAY--SWEDEN
+
+
+Denmark pays postal subventions to two steamship companies for carrying
+the mails to Sweden and to Iceland, and "trade" subsidies to other
+companies to encourage particularly the export trade. The latter are
+payments directly for reductions in freight rates, which are supervised
+by the Government.[EI] The postal subventions are not large, and they
+are generally accepted as only fair remuneration for service
+rendered.[EJ]
+
+       *       *       *       *       *
+
+Norway and Sweden both give subsidies for mail carriage solely, and
+grant no direct bounties on shipping. Both, however, undertake the
+furtherance of commerce and navigation through "State contributions," in
+the form of loans to shipowners from Government funds.[EK] Such aid has
+been granted to several steamship lines. In 1910 the Swedish Government
+granted a loan equivalent to half a million dollars American money
+toward the capital of a new line between Swedish ports and New York,
+Philadelphia, and Baltimore.[EL] Shipping is exempt from taxation in
+both countries.[EM] The Swedish tonnage in 1910 stood at a total of 1472
+vessels of 918,079 tons.[EN]
+
+       *       *       *       *       *
+
+In Norway the laws put no restriction upon shipowners as to purchase in
+any market. Most of her steam tonnage is foreign-bought, and largely
+second-hand. Her merchant fleet, however, consists for the greater part,
+of wooden sailing-ships, and these are mostly of domestic build.[EM]
+Besides the mail subsidies the Government grant "trade" subsidies to
+some forty Norwegian steamship companies to enable them to maintain
+routes to various foreign ports. These subsidies amount to about half a
+million dollars annually.[EO] In 1910 Norway stood in tonnage fourth
+among European maritime countries: her total tonnage being 2,014,533
+tons.[EP] Norway has by far the largest percentage of sea-faring
+population, and her mariners are found in the crews of all nations in
+Europe and America.
+
+FOOTNOTES:
+
+[Footnote EI: Meeker.]
+
+[Footnote EJ: Parl. papers.]
+
+[Footnote EK: Meeker.]
+
+[Footnote EL: U.S. Con. Rept., no. 82, 1910, p. 106.]
+
+[Footnote EM: Meeker.]
+
+[Footnote EN: Lloyd's Register, 1910-11.]
+
+[Footnote EO: Report of (U.S.) commissioner of navigation for 1909.]
+
+[Footnote EP: Lloyd's Register, 1910-11.]
+
+
+
+
+CHAPTER X
+
+RUSSIA
+
+
+In Russia steamship lines were early subsidized with mileage bounties,
+besides receiving postal subventions; and later the Government adopted
+the policy of returning the Suez Canal tolls to the subsidized lines.
+The mileage subsidies are direct bounties avowedly for the encouragement
+of Russian navigation, and are very large.[EQ]
+
+In 1898 a Government commission, appointed to consider and report upon
+the state of the empire's mercantile marine, declared that Russia was
+losing a vast sum annually through the lack of a sufficient commercial
+fleet of her own, and yet no progress seemed to be making toward
+increasing her tonnage. To remedy this unsatisfactory condition the
+commission suggested the removal of the duty on ships built abroad for
+Russia, and the free admission of all material necessary for ship
+construction.[ER]
+
+Favoring laws followed. By a measure of July that year (1898) ships
+bought abroad, if destined for the foreign sea-borne trade, were
+exempted for a period of ten years from the heavy duties levied on such
+vessels.[EQ] The next year (1899) the coasting trade, reserved
+exclusively for Russian ships, was extended to include navigation
+between any two Russian ports in any seas; and, further to restrict this
+trade to subjects of the empire, it was enacted that ships engaged in it
+must be manned exclusively by Russian officers and seamen.[EQ]
+
+At this period Russia's shipping industry, outside the Government works
+for the construction of battle-ships, was of comparatively little
+consequence. In the few extensive ship-yards river steamers, tugs, and
+other small craft, built from Russian materials and by Russian workmen,
+were chiefly turned out. The materials could be bought cheaper abroad,
+but Russian labor was cheaper. According to the United States consul at
+St. Petersburg, the wages of common workmen were then from fifty-one to
+sixty-four cents a day, while skilled workmen were receiving but
+seventy-seven cents to one dollar a day.[ES]
+
+In the decade 1890-1901 the amount of subsidies expended directly to
+encourage shipping increased rapidly, and the tonnage increased in
+extent and importance. In 1890-91 the total tonnage stood at 427,335
+tons of which 156,070 were steam and 271,265 sailing ships. In 1902-03 a
+total of 800,334 tons was reached, of which 556,102 were steam and
+244,232 sailing ships.[ET]
+
+In 1902 the granting of bounties in the form of loans to ship-owners was
+proposed, with the object of inducing them to buy Russian ships built of
+Russian materials instead of foreign product. The scheme contemplated a
+mortgage on the finished ship at fifty per cent of the actual cost,
+without interest, to cover a period of twenty years, the loans to be in
+equal yearly payments. The amount of the bounty was to depend upon the
+difference between the cost of home-built and foreign-built ships. The
+loans were to be made only on first-class sea-going steamers. The plans
+and specifications were to be approved by the minister of finance before
+building; and steamers of over one thousand tons register must show an
+average speed of not less than ten knots on a six hours' trial; those
+under one thousand tons, of not less than eight knots. In addition to
+the loans the Government was to bear part of the expense of insurance.
+To facilitate the export of Russian goods in Russian-built ships, a
+rebate was allowed of half the expense of Russian coal used in steamers
+carrying less than three-fourths of a full cargo on export, and one-half
+cargo on import. It was estimated that this scheme for fostering
+domestic shipbuilding would entail smaller drafts on the national
+treasury than would the granting of direct construction and navigation
+premiums.[EU]
+
+Progress was checked appreciably by the war with Japan (1904-05). But
+the year after, the empire was active again in advancing her interests
+in the East, by systematically granting subsidies to steamship lines to
+various Asiatic points.[EV] By 1909 the tonnage had been brought to a
+total of 700,959 tons, approaching that of the year before the war. Of
+this total 443,243 was steam tonnage. The greater part of the steam
+fleet was foreign built, only 167 of the total, 898 steamers, being of
+Russian product. The largest number were built in England (341). Others
+were obtained from various European yards. More than ninety per cent
+were of iron and steel. Of the sailing-ships, ninety per cent were home
+product.[EW] In 1910 the total tonnage stood at 887,325 tons.[EX]
+
+The mileage subsidies in 1910 were going principally to eleven steamship
+companies; the postal subventions mainly to four. Those receiving the
+mileage subsidies carry the mails and Government passengers free. The
+largest mileage subsidy goes to the Black Sea Navigation Company, the
+oldest and most important of the subsidized lines (founded in 1856, with
+Government aid).[EY] In addition to the subsidy the Government pays back
+the Suez Canal tolls. The Russian Volunteer Fleet stands second on the
+list of subsidy receivers. This is practically a Government affair. It
+was created in the war-time of 1877-78, by private subscription, as an
+auxiliary war fleet; and was reorganized for general service in 1892.
+The members of the board of managers are State nominees, and the
+officers and crews are regarded as employees of the crown.[EZ] The
+subsidy is fixed at six hundred thousand rubles ($309,999) a year; and
+the refunded Suez Canal tolls amount to another six hundred thousand
+rubles.[FA]
+
+The mileage subsidies, given directly to foster shipping, increased
+rapidly from year to year after 1890, while the postal subventions, for
+mail carriage chiefly, remained practically constant.[FB]
+
+FOOTNOTES:
+
+[Footnote EQ: Meeker.]
+
+[Footnote ER: U.S. Consul Smith, Moscow, in Con. Rept., no. 216, p. 149,
+Sept., 1898.]
+
+[Footnote ES: U.S. Con. Gen. R.T. Greener, St. Petersburg, in U.S. Con.
+Rept., no. 236, p. 91, May, 1900.]
+
+[Footnote ET: Report of The Merchant Marine Commission (U.S.), 1905,
+vol. II, p. 947.]
+
+[Footnote EU: U.S. Commercial Agent R.T. Greener, Vladivostock, in U.S.
+Con. Repts., no. 265, p. 218, October, 1902.]
+
+[Footnote EV: Same, no. 313, p. 140, October, 1906.]
+
+[Footnote EW: Con. Gen. John H. Snodgrass, Moscow, in U.S. Con. Repts.,
+no. 354, pp. 32-33, March, 1910.]
+
+[Footnote EX: Lloyd's Register, 1910-11.]
+
+[Footnote EY: Con. Gen. Snodgrass, Con. Repts., no. 102, Oct., 1910.]
+
+[Footnote EZ: Parl. papers: Report of com. of enquiry into Steamship
+Subsidies, 1901.]
+
+[Footnote FA: List given in Rept. of Mer. Marine Com., with totals paid
+in 1902-03, vol. 2, p. 946.]
+
+[Footnote FB: Mecker.]
+
+
+
+
+CHAPTER XI
+
+JAPAN--CHINA
+
+
+While France is the bounty-giving nation _par excellence_, Japan is a
+pressing second. The development of a modern merchant marine, together
+with a modern navy, was among the first undertakings of the awakening
+empire upon her assumption of Occidental civilization. Adopting what
+seemed to her statesmen of the new regime, from their study of Western
+methods, to be the speediest way to that end, she started out
+energetically to attain it through lavish money-grants from the national
+treasury for the establishment of steamship companies of her own people
+in coastwise and ocean service, and of modernized ship-yards and
+shipbuilders.
+
+The initial venture resulted in the creation of a steamship monopoly.
+This was the subsidizing, in 1877, of the pioneer concern, to supply
+steam communication between various domestic ports, and also with
+Siberia, China, and Corea. It was founded by a broad-visioned Japanese
+merchant, Jwasaki Yataro,[FC] and controlled by him. To break his
+monopoly the Government in 1882 set up a rival State-supported
+company.[FC] After a period of "desperate competition" and warfare,
+Jwasaki persuaded the new concern to unite with his. So was effected a
+community of interests after the most approved Western pattern.[FC] By
+this union was formed, in 1885, the powerful _Nippon Yusen Kaisha_
+(Japan Mail Steamship Company), which remained the most powerful of
+Japanese steamship establishments, with lines running to the same ports
+to which the American steamers run.
+
+Coincident with the State-aiding of steamship companies was the granting
+of liberal postal subvention. Next followed the institution of a general
+subsidy system, frankly designed to stimulate domestic shipbuilding and
+to further navigation by Japanese ships.
+
+This system was embodied in two acts promulgated in 1896, the year after
+the finish of the Japan-China War (1894-95), when the merchant marine
+was growing pretty rapidly, but not rapidly enough for the aspiring
+nation. These were, a Shipbuilding Encouragement Law, the aim of which
+was to stimulate the building of vessels above 700 tons; and a
+Navigation Encouragement Law, to foster open-sea navigation. Their model
+was the French system.
+
+These laws offered construction and navigation subsidies, and also made
+provision for a widely extended postal service with increased postal
+subventions. The construction bounties were available for "any company
+composed of Japanese subjects exclusively as members and shareholders
+which shall establish a ship-yard conforming to the requirements of the
+Minister of State for Communications, and shall build ships." The rates
+were fixed as follows: for ships of over 1000 tons, twenty yen ($9.96)
+per gross ton; of over 700 and under 1000 tons, twelve yen; for engines
+built with ships, or in any other domestic dock-yard, with the consent
+of the Minister of Communications, five yen per horsepower. Japanese
+materials only were to be used, unless the Minister of Communications
+should give permission to use foreign materials. The navigation bounties
+were granted only for iron and steel ships owned exclusively by Japanese
+subjects, and plying between Japan and foreign ports. The rates in this
+class were: twenty-five sen (about 12-1/2 cents) per gross ton per
+thousand miles run for ships of 1000 tons steaming at ten knots an hour;
+ten per cent added for every additional 500 tons up to 6000 tons, and
+twenty per cent for every additional knot up to seventeen. Foreign-built
+ships less than five years old, owned by Japanese, were admitted to
+these bounties. The postal routes established were fifteen in number,
+calling for an annual expenditure of 4,964,404 yen (about $2,482,202)
+when in full operation. The payments for postal service were to be
+computed at the mileage rate given for navigation. Previous to this act
+the postal subventions had amounted annually to nine hundred and
+forty-five thousand yen in 1890 and 1891, and nine hundred and thirty
+thousand yen in the subsequent years.[FD]
+
+The effect of these laws was to stimulate overproduction. The _Nippon
+Yusen Kaisha_ ordered eighteen large freight steamers aggregating 88,000
+tons. Other companies doubled and trebled their fleets.[FD] One result
+of the overproduction was the forcing down of freights. This, together
+with the business depression of 1898-99, brought losses to the shipping
+companies despite the large subsidies. The rapidly increasing amounts of
+the subsidies, too, were giving the Government concern. From a total of
+1,027,275 yen in 1896 the sum expended annually had grown by 1899 to
+5,846,956 yen. The total paid between 1896 and 1899 had amounted to
+13,133,440 yen, about $6,566,720.[FD]
+
+Accordingly, in 1899 (March), a law was enacted modifying the system.
+The navigation bounties on foreign-built ships were reduced by half,
+while the subventions to the postal lines were fixed at certain yearly
+sums. A law of 1900 (February 23) extended the postal services. Under
+these laws the postal subventions reached a total of about 5,647,811 yen
+($2,823,905) a year. Of this total the _Nippon Yusen Kaisha's_ was the
+lion's share,--4,299,861 yen, about $2,149,930.[FD]
+
+After the passage of these laws the various companies further increased
+their tonnage, but the merchant marine grew more wholesomely for a
+while. In 1902 the total tonnage had reached 934,000 tons, and the
+Japanese mercantile fleet had risen to the position of eighth in the
+world in point of tonnage, whereas in 1892 it was only thirteenth.[FE]
+In 1907 the United States consul at Yokohama wrote: "The building of
+ships of over ten thousand tons in Japanese yards is now quite
+common.... The war [with Russia] has given a great impetus to the
+shipbuilding and dock-yard industry which has made remarkable progress
+during the last few years."[FF]
+
+That year (1907) the Government brought forward several ship-subsidy
+bills making provision for further Japan sea services.[FG] In 1908 the
+amount of State aid to the merchant marine had increased to an
+equivalent of $6,170,566 and additional amounts were asked for, one for
+the line to South America.[FH] The budget for 1908-09 carried the
+largest amounts yet devoted by Japan to ship subsidizing. At the end of
+1908 official statistics placed the number of steamers at 1618, with a
+gross tonnage of 1,153,340.42. Of these, one hundred and one were
+steamers of more than three thousand tons.[FH]
+
+In 1909 a new subsidy system was adopted (the laws of 1896 revised), to
+go into effect January 1 1910. The fixed navigation bounties granted by
+the old system on specified routes were abolished, and a general subsidy
+offered open to all steamships conforming to the provisions of the new
+law. The subsidized open-sea routes, however, were limited to four--the
+European, the North American, South American, and Australian;[FI] and
+coasting services in the Far East were not affected. Among other
+conditions imposed on the beneficiaries were the requirements that
+steamers must carry more than one-half their maximum load; that each
+must have a wireless telegraph outfit, this, however, instituted at the
+Government's expense; that the Department of Communications be furnished
+with information as to freights and passenger rates; and that proper
+terminal facilities, as piers, warehouses, lighters, be provided by the
+subsidized companies.[FJ] The steamers receiving the full subsidy must
+be home-built, of steel, of over 3000 tons gross, and showing a speed of
+at least twelve knots per hour. The rate was fixed at fifty sen per
+gross ton for every thousand nautical miles, and ten per cent of this
+sum added per additional speed of one nautical mile an hour, according
+to the conditions of the route. Upon a vessel the age of which exceeds
+five years the subsidy decreases five per cent each year till the age
+of fifteen is reached, when it ceases. Foreign-built steamers under five
+years of age, which may be put in service with the sanction of the
+Government authorities, are entitled to half of the subsidy. The
+construction subsidies were arranged in two classes, and each class in
+four grades.[FK] The rates were slightly increased over those of the law
+of 1896, and their benefits were limited to steel vessels of over 1000
+tons instead of 700 tons.
+
+The total appropriations for ship subsidies in the budget for 1911-12
+amounted, in American money, to $6,845,995, of which $6,294,020 were for
+navigation, and $551,975 for construction subsidies: an increase of
+$478,387 in the former class over the appropriation of the previous
+year, and a decrease in the latter class of $6,835.[FL]
+
+The total Japanese tonnage in 1910 stood at 1,149,200 tons.[FM] The
+_Nippon Yusen Kaisha_ practically owns nine-tenths of the ocean-going
+steamships flying the Japanese flag.[FN]
+
+       *       *       *       *       *
+
+China, too, taking on Western ways, is emulating Japan in establishing a
+modern merchant marine. The Government is giving State aid to native
+steamship companies, and subsidizing ship-yards. According to the United
+States consul-general at Hongkong the Government is now (1911) to
+furnish half of the amount of an extension of the capital of the Chinese
+Merchants' Steam Navigation Company to twenty million taels (about
+$12,600,000 gold), and thirty additional steamers of modern type are to
+be built for service--ten on foreign routes, including a route to the
+United States, and twenty on routes between Chinese ports; while a new
+ship-yard is to be set up at Shanghai under Government auspices,
+capitalized at five million taels (about $3,200,000 gold).
+
+FOOTNOTES:
+
+[Footnote FC: Meeker.]
+
+[Footnote FD: Meeker.]
+
+[Footnote FE: U.S. Con. Rept., no. 282, March, 1904.]
+
+[Footnote FF: U.S. Con. Rept., no. 316, Jan, 1907, pp. 92-93.]
+
+[Footnote FG: Con. Gen. H.B. Miller, Yokohama, in Con. Repts., no. 32,
+pp. 120-121, May, 1907.]
+
+[Footnote FH: Vice Con. Gen. E.G. Babbitt, Yokohama, in Con. Repts., no.
+344, p. 216, May, 1909.]
+
+[Footnote FI: Japan Year Book, 1911.]
+
+[Footnote FJ: U.S. Con. Gen. Thomas Sammons, Yokohama, in Daily Con.
+Repts., no. 38, Aug. 17, 1910.]
+
+[Footnote FK: Japan Year Book, 1911.]
+
+[Footnote FL: U.S. Ambassador Thomas J. O'Brien, Tokyo, in Daily Con.
+Repts., no. 123, May 26, 1911.]
+
+[Footnote FM: Lloyd's Register, 1910-11.]
+
+[Footnote FN: Japan Year Book, 1911.]
+
+
+
+
+CHAPTER XII
+
+SOUTH AMERICA
+
+
+Brazil gives subventions from the Federal treasury to several foreign
+steamship companies, and some of the States of the federation also make
+similar grants from their treasuries. Besides the subventions to lines
+to foreign ports, the Government grants State aid to a considerable
+number of coast lines operating between Rio de Janeiro and other
+Brazilian ports. The total amount of the subventions in 1910 was equal
+to $1,437,880.[FO] The principal beneficiary was the _Lloyd Brazileiro_,
+maintaining the line between Brazilian ports and the United States.
+
+       *       *       *       *       *
+
+Argentina is adopting a policy of giving subsidies to foreign steamship
+companies which extend her communications with foreign ports. As far
+back as 1865 a decree was issued offering a subsidy of twenty thousand
+dollars a year for a line between Argentina and the United States. But
+it was not taken. In 1911 the Government was prepared to pay a subsidy
+to a new steamship company promoted to furnish a regular service to
+South Africa.[FP] In 1911 there appeared the first steam vessel flying
+the American flag at Buenos Aires in twenty years.[FQ]
+
+Chile grants mail subsidies, which have no appreciable effect in the
+merchant marine.[FR]
+
+FOOTNOTES:
+
+[Footnote FO: Con. Gen. George E. Anderson, Rio de Janeiro, in Daily
+Con. Repts., no. 55, p. 719, Sept. 7, 1910.]
+
+[Footnote FP: Daily Con. Repts., March 18, 1911.]
+
+[Footnote FQ: Same, January 20, 1911.]
+
+[Footnote FR: Meeker.]
+
+
+
+
+CHAPTER XIII
+
+THE UNITED STATES
+
+
+While a navigation code founded in 1790 and 1792, and developed in 1816,
+1817, and 1820, after the model of the then existing English code,[FS]
+has been retained in modified form through enactments in subsequent
+years, a system of general ship-subsidies, though repeatedly proposed,
+has never been adopted by the United States. From 1793 to 1866 bounties
+were given to fishing vessels and men employed in the bank and other
+deep-sea fisheries,[FT] but no subsidies to the merchant marine were
+granted till 1845, and these were only postal subsidies--payments in
+excess of an equivalent for services to be rendered in ocean
+mail-carriage. The law enacted that year had for its declared purpose
+the encouragement of American ocean steamship-building and running. With
+this act, therefore, the real history of Government aid to domestic
+shipping in this country begins.
+
+At the time of the adoption of this policy America was still leading the
+world in ocean sailing-ships with her splendid fleets of fast-sailing
+packets and "clippers", while England had taken the lead in steamships.
+The law of 1845 was the culmination of a move begun in Congress in 1841,
+the year after the first Cunarder had crossed from Liverpool to Halifax
+and Boston. Its aim was to parry England's bold stroke for maritime
+supremacy with her State-aided steamship lines, and directly to "protect
+our merchant shipping from this new and strange menace."[FU] The first
+move of 1841 was for an appropriation of a million dollars annually for
+foreign-mails carriage in American-owned ships.[FU]
+
+The law of 1845 (March 3) authorized the postmaster-general to contract
+with American ship-owners exclusively for this service to be performed
+in American vessels, steamships preferred, and by American citizens, for
+a period of from four to ten years, with the proviso that Congress by
+joint resolve might at any time terminate a contract. The subsidy was
+embodied in the rates of postage thus fixed: upon all letters and
+packets not exceeding a half-ounce in weight, between any ports of the
+United States and any foreign ports not less than three thousand miles
+distant, twenty-four cents, with the inland postage added; upon letters
+and packets over one half-ounce in weight, and not exceeding one ounce,
+forty-eight cents, and for every additional half-ounce or fraction of an
+ounce, fifteen cents; to any of the West India Islands, or islands in
+the Gulf of Mexico, ten cents, twenty cents, and five cents,
+respectively; upon each newspaper, pamphlet, and price-current to any of
+the ports and places above enumerated, three cents: inland postage to be
+added in all cases. The postmaster-general was to give the preference to
+such bidder as should propose to carry the mails in a steamship rather
+than a sailing-ship. Contractors were to turn their ships over to the
+Government upon demand for conversion into ships of war, the Government
+to pay therefor the fair full value, as ascertained by appraisers. The
+postmaster-general was further authorized to make ten-years' contracts
+for mail carriage from place to place in the United States in steamboats
+by sea, or on the Gulf of Mexico, or on the Mississippi River up to New
+Orleans, on the same conditions regarding the transfer of the ships to
+the Government when required for use as war ships.[FV]
+
+The next year, 1846, in the annual post-office appropriations act (June
+19), provision was made for the application of twenty-five thousand
+dollars toward the establishment of a line of mail steamers between the
+United States and Bremen; and early in 1847 (February 3) a contract was
+duly concluded for a Bremen and Havre service, the first under the law
+of 1845.
+
+This was a five years' contract entered into with the Ocean Steam
+Navigation Company, upon the basis of an earlier agreement (February
+1846) with Edward Mills of New York, which Mr. Mills had transferred to
+the new organization. The subsidy was fixed at one hundred thousand
+dollars a year for each ship going by Cowes to Bremen and back to New
+York once in two months a year, and seventy-five thousand dollars a year
+for each ship going by Cowes to Havre and back to New York. The
+contractors were to build within a year's time four first-class
+steamships of not less than 1400 tons, nor less than a thousand
+horsepower; and were to run their line "with greater speed to the
+distance than is performed by the Cunard Line between Boston and
+Liverpool and back."[FW] Provision for the subsidy thus called for was
+promptly made in this item in the post-office appropriation bill for the
+ensuing year, approved March 2: "for transportation by steam-ships
+between New York and Bremen according to the contract with Edward Mills,
+$258,609."[FX]
+
+The next step was the enactment of a law which had for its declared
+objects "to provide efficient mail services, to encourage navigation and
+commerce, and to build up a powerful fleet in case of war."[FY] This
+measure, approved March 3, 1847, entitled "An act to provide for the
+building and equipment of four naval steamships," made provision for the
+construction, with Government aid, of merchant mail-steamships under the
+supervision of the Navy Department that they might be rendered suitable
+if needed for war service.
+
+The act directed the secretary of the navy to accept on the part of the
+Government certain proposals that had been made for the carriage of the
+United States mails to foreign ports in American-built and
+American-owned steamships. These proposals had been submitted to the
+postmaster-general (March 6, 1846) by Edward K. Collins and associates
+(James Brown and Stewart Brown) of New York, and A.G. Sloo of
+Cincinnati: one for mail transportation by steamship between New York
+and Liverpool, semimonthly, the other between New York and New Orleans,
+Havana, and Chagres, twice a month. The secretary was directed to
+contract with Messrs. Collins and Sloo in accordance with the provisions
+laid down in this act. These required that the steamers be built under
+the inspection of naval constructors and be acceptable to the Navy
+Department; that each ship carry four passed midshipmen of the navy to
+serve as watch-officers, and a mail agent approved by the
+postmaster-general. Mr. Sloo's ships for his West India service were to
+be commanded by officers of the navy not below the grade of lieutenant.
+The secretary was further directed to contract for mail-carriage beyond
+the Isthmus,--from Panama up the Pacific coast to some point in the
+Territory of Oregon, once a month each way; but this service could be
+performed in either steam or sailing ships, as should be deemed more
+expedient.[FZ]
+
+All the contracts thus provided for were concluded the same year. Each
+was to run for ten years. The first executed was that with Mr. Sloo. It
+called for five steamships of not less than 1500 tons, and a
+semi-monthly service. The line was to touch at Charleston, if
+practicable, and at Savannah. The ships were to have engines by direct
+action; and each ship was to be sheathed with copper. The subsidy was
+fixed at two hundred and ninety thousand dollars a year, a rate of
+$1.83-1/2 per mile, the distance to be sailed out and back being 158,000
+miles.[GA] Mr. Sloo immediately set over his contract to George Law,
+Marshall O. Roberts, and Bowes McIlvaine, of New York.[GB] The second
+contract was for the Pacific service, connecting with the mail by the
+Sloo line across the Isthmus. This was made with Arnold Harris of
+Arkansas. It provided for a monthly service between Panama and Astoria,
+Oregon, calling at San Diego, Monterey, and San Francisco, with a
+subsidy of one hundred and ninety-nine thousand dollars per annum. Three
+steamers were to be furnished, two of not less than a thousand tons
+each. Upon receiving the contract Mr. Harris immediately transferred it
+to W.H. Aspinwall of New York, representing the newly formed Pacific
+Mail Steamship Company.[GC] The third was the Collins contract. This
+stipulated for a semi-monthly service between New York and Liverpool
+during the eight open months of the year, and a monthly service through
+the four winter months, with five steamers, each of not less than 2000
+tons and engines of a thousand horsepower. The first ship was to be
+ready for service in eighteen months after the date of the contract,
+November 1, 1847. The subsidy was fixed at $19,250 per twenty round
+trips, or three hundred and eighty-five thousand dollars a year, a rate
+of $3.11 a mile for sailing about 124,000 miles.[GD]
+
+By subsequent acts the secretary of the navy was authorized to advance
+twenty-five thousand dollars a month on each of the ships called for by
+these several contracts from the time of their launching to their
+finish; and the date of the completion of the first Collins steamer and
+the opening of the New York and Liverpool service was extended to June
+1, 1850.[GE]
+
+At the same time that the secretary of the navy was executing these
+contracts the postmaster-general under the authority of an act "to
+establish certain Post Routes and for other purposes," also approved
+March 3, 1847,[GF] was contracting for a steamship mail-service between
+Charleston and Havana, with a subsidy of forty-five thousand dollars per
+annum. This contract was entered into with M.C. Mordecai of Charleston,
+who agreed to furnish steamships suitable for war purposes, and to
+perform a monthly service.[GG] Several other propositions for steamship
+service to various foreign countries were made to the postmaster-general
+at this time, but none was accepted.[GH]
+
+The pioneer Bremen-Havre line began its service on the first day of June
+1847, with two steamers. These were the _Washington_ and the _Hermann_,
+built in New York, strong and large, of 1640 tons and 1734 tons,
+respectively, side-wheelers, bark-rigged. At first they made the run to
+Bremen in from twelve to seventeen days, much better time than the
+average clipper.[GI] But up to 1851 they had no regular schedule of
+sailings, and, their speed being unsatisfactory, few mails were sent by
+them. The subsidy payments, therefore, were made for each voyage
+separately.[GJ] They had also ceased to command the patronage of
+travellers. Nevertheless, as a committee of the Senate in 1850 reported,
+they were believed to have been "profitable to their owners as freight
+vessels, and of essential service in promoting the interests of American
+commerce."[GK] The full service, with twelve trips to Bremen and twelve
+to Havre, was finally begun in 1851, when two more, and larger
+ships,--the _Franklin_ and the _Humboldt_, each of 2184 tons, were added
+to the Havre line. Four years before, the original company, because of
+financial difficulties, had organized a separate corporation for the
+Havre service. In 1852 Congress extended the contract to 1857;[GJ] and
+Southampton was made the point of shifting the mails.
+
+The New York and Chagres, the Charleston and Havana, and the Pacific
+line, were all under way before the close of 1848. The Pacific line was
+the first in operation. The service began with the three steamers called
+for by the contract, the first sailing from New York on the sixth of
+October, the other two early in December. They were the _California_,
+1050 tons, the _Panama_, 1087 tons, the _Oregon_, 1099 tons, all built
+in New York. The New York and Chagres line was started also in December
+with the sailing of the _Falcon_, 1000 tons, a purchased steamer which
+the Navy Department accepted temporarily, while the new ships were
+building, that the service might be immediately begun. The opening of
+the new territory south of Oregon acquired through the Mexican War, and
+the beginning of the rush of the "Argonauts" to the newly discovered
+gold fields of California, had made all concerned anxious to get these
+connecting steamship lines a-going.
+
+At first the service was halting because of unavoidable circumstances.
+The Pacific Company were unable at once to meet the demands. Sufficient
+or competent crews could not be obtained on the California coast during
+the gold excitement,[GL] at fever heat in 1849. But it was not long
+before more ships were put on, and the service improved and prospered.
+By September, 1849, the Chagres company had their first completed ship
+in commission. This was the _Ohio_, 2432 tons, built in New York. By
+June, 1850, the second, the _Georgia_ (and the third of the line, for
+the _Falcon_ was retained) was running. Soon afterwards the _Illinois_
+was added. At about the same time the Pacific company had added two more
+to their fleet--the _Columbia_ and the _Tennessee_. In 1851 the
+postmaster-general was authorized to increase the Pacific trips to
+semi-monthly; and the subsidy was increased. An additional contract
+(March 13) was then made with Mr. Aspinwall, as president of the Pacific
+Mail.[GM] This called for the enlargement of the line within a year, to
+six steamers; and for semi-monthly trips from Panama to Oregon and back,
+with stops and mail delivery at named points in California; and
+increased the company's subsidy by one hundred and forty-nine thousand
+two hundred and fifty dollars per annum. Thus the yearly total became
+three hundred and forty-eight thousand two hundred and fifty dollars.
+Before the semi-monthly trips were begun, San Diego and Monterey were
+dropped for the regular service, to be served by a slower line.[GN] Also
+this year (1851) two more steamers were added to the fleet.
+
+By this time on the Atlantic side the Collins Line was in promising
+operation. The service had auspiciously begun in 1850 with four of the
+five steamships called for by the contract. These were the _Atlantic_,
+2845 tons, the _Arctic_, 2856 tons, the _Baltic_, 2723 tons, and the
+_Pacific_, 2707 tons, each some seven hundred tons larger than the
+measurement stipulated--"at least 2000 tons." All were built in New
+York ship-yards; were especially designed for fast sailing; and in size,
+model, finish, and fittings were pronounced to be "such steamers as the
+world had never seen."[GO] In all respects they were superior to the
+Cunarders with which they were aggressively to compete; and it was the
+boast of the Americans that they would "beat the English in steam
+navigation, as they had beaten them in fast sailing." All associated
+with the enterprise were of large experience in maritime affairs. Mr.
+Collins, a native of Truro, Cape Cod, and long a shipping merchant of
+New York, had been at the head of fast clipper-ship lines--the New
+Orleans and Vera Cruz packet line, and the more famous "Dramatic line"
+(the ships named for plays and players) of transatlantic sailers. The
+commanders of the steamers were all tried clipper captains.
+
+The _Atlantic_ made the initial voyage, steaming gallantly out of New
+York harbor on the twenty-seventh of April, a month before the contract
+time for the beginning of the service. The _Pacific_ followed in June,
+the _Baltic_ in November, the _Arctic_ in December. They beat the
+Cunarders' time on the average by a day. Their popularity was
+immediately established. Their passenger traffic rapidly increased. But
+the severe condition of the mail contract, with their quick sailings
+allowing only short stays in port, made it impossible for the company to
+secure a profitable share of the freight business without a heavy outlay
+for slower cargo boats. Within a few months after the start of the line
+the Cunard Company had cut freight rates from seven pounds ten shillings
+per ton to four pounds. So, while the Collins ships continued steadily
+to outsail the Cunarders and got the bulk of the passenger traffic, the
+Cunarders got most of the freighting. Moreover, the Collins ships were
+far more expensive to run. Indeed, the cost of the rapid service was
+enormous. Mr. Collins stated before a committee of Congress that to
+save a day or a day and a half in the run between New York and Liverpool
+cost the company nearly a million dollars annually.
+
+Accordingly more subsidy was asked for. This was granted in 1852, the
+act being stimulated by England's move late in 1851 in raising the
+Cunards' subsidy to £173,340 ($843,000), for forty-four trips a year:
+about nineteen thousand dollars per voyage. The extra allowance lifted
+the Collins subsidy to $853,000 for twenty-six trips a year,
+thirty-three thousand dollars per voyage, a rate of upward of five
+dollars a mile.[GP]
+
+The competition now became sharper. Still the Collins Line maintained
+its record sailings, and continued to beat the English. Then it was
+sharply checked by a grave disaster. On the twenty-fourth of September,
+1854, the _Arctic_, when forty miles off Cape Race, rushing through a
+fog, was rammed by a French steamer, and sunk with three hundred and
+seven souls. This calamity had a depressing effect on the company's
+affairs. Two years later, in 1856, Congress determined to reduce the
+subsidy, and notice of the discontinuance of the extra allowance of 1852
+was ordered.[GQ] Only a few weeks after this action another disaster,
+even more appalling than the first one, befell the company. On September
+23 the _Pacific_ sailed from Liverpool for her homeward voyage with a
+full complement of passengers; passed to sea out of sight; and was never
+more heard of. She was replaced by the _Adriatic_, the fifth ship called
+for by the contract, which was launched the year before, the largest,
+finest, swiftest, and most luxurious then afloat; and the company
+struggled on against accumulating odds.
+
+At length, in 1858, Congress abandoned the subsidy system and returned
+to the method of payment for foreign mail-carriage according to the
+actual service rendered, with a proviso, however, favoring American
+ships, such to receive the inland-postage plus the sea postage, while
+foreign ships were to have the sea postage only.[GR]
+
+This was the final blow. The last voyage of the Collins Line was made
+in January, 1859. Then it perished. In April following, the ships were
+seized by the mortgagees and sold. So closed the career of the pioneer
+United States ship company in the transatlantic service. The splendid
+_Adriatic_ passed to English ownership and the American flag gave way to
+the British. For several years this ship "held the transatlantic record
+with a passage of five days nineteen hours from Galway to St.
+John's."[GS]
+
+Of the other subsidized lines, the ships of the Bremen service were
+withdrawn and laid up after the subsidy ceased. The Havre line continued
+a while longer with two ships that had replaced the _Humboldt_ and the
+_Franklin_, both of which had been lost,--the _Humboldt_ wrecked at
+Halifax on December 5, 1853; the _Franklin_ stranded on Montauk Point on
+July 17, 1854. Then with the charter of the two new steamers by the
+Government in 1861 for use in the Civil War, the Havre line also
+disappeared.
+
+The cost to the Government of this first steamship subsidy venture,
+covering the thirteen years between 1845 and 1858, was approximately
+fourteen and a half million dollars.[GT]
+
+Meanwhile, within this period, the American wooden sailing-ships
+continued to be the glory of the seas, and the American clippers reached
+their highest development. The appearance of steamships on the North
+Atlantic and the Pacific had inspired the producers of the "wonderful
+American sailing-ships" to greater efforts for their perfection; and the
+clipper, surpassing all other types of sailers in size, sea-qualities,
+and speed, was the result of the intensified rivalry of canvas and
+steam.[GU] The American clipper-ship era fairly opened with the advent
+of the Collins Steamship Line.[GV] Between 1850 and 1855 clipper-ships
+were built for nearly every trade,[GW] and they were on every sea. Some
+of the first were employed in the transatlantic packet service. More
+became engaged particularly in the "booming" trade to California, in the
+long-voyage traffic to China and India.[GX] "When John Bull came
+floating into San Francisco, or Sydney, or Melbourne, he used to find
+Uncle Sam sitting carelessly, with his legs dangling over the wharf,
+smoking his pipe, with his cargo sold and his pockets full of
+money."[GY] The Crimean War, 1853-56, opened a new and prosperous market
+for American fast sailing-ships, as transports. To meet the demand
+American ship-yards produced in 1855 more tonnage than they had ever
+built before.[GZ] The sailing-ship interests strenuously opposed the
+subsidy system. They denounced it as class legislation unjustly favoring
+the few, and urged its abolishment.[HA] How strong this influence was in
+bringing about the change in policy is a mooted question.
+
+       *       *       *       *       *
+
+No further move for fostering the American merchant marine with State
+aid directly or indirectly, was made till 1864. Then the
+steamship-subsidizing policy was revived, first with a proposition for
+the establishment of an American mail-line to Brazil. A subsidy of two
+hundred and fifty thousand dollars per year was proposed, one hundred
+and fifty thousand to be paid by the United States and one hundred
+thousand by the Brazilian Government. Congress endorsed the scheme. The
+act embodying it (May 28)[HB] authorized the postmaster-general to
+contract for a monthly service between the two countries, touching at
+St. Thomas, W.I., by first-class American sea-going steamships of not
+less than 2000 tons. The steamers were to be built under naval
+inspection, and to be subject to taking for war service. Bids were to be
+openly advertised for. The contract was to run for ten years. Thus was
+established the pioneer American line between Philadelphia and Rio de
+Janeiro, which continued from 1865 to 1876, and was then abandoned.
+
+In the same session of Congress a bill was introduced, authorizing an
+annual subsidy of five hundred thousand dollars for an ocean
+mail-steamship service to Japan and China via Hawaii. This also received
+favorable consideration, and was passed February 17, 1865. The service
+was to be monthly, performed by American-built ships of not less than
+3000 tons, also constructed under naval inspection. Tenders for the
+contract were to be advertised for, but bids only from United States
+citizens were to be entertained. The contract was to run for ten years.
+Only one bidder appeared (as was evidently expected)--the Pacific Mail
+Steamship Company. The contract went to that company, and under it, in
+1867, their prosperous Asiatic service began. At the outset they were
+released from the obligation of stopping at Hawaii, and Congress voted
+another subsidy--seventy five thousand dollars per annum--for a distinct
+Hawaiian service.[HC] The contract for this service, also advertised
+for, went to the California, Oregon, and Mexican Line.
+
+       *       *       *       *       *
+
+Thus far the granting of postal subsidies for the establishment of
+steamship lines alone had engaged the advocates of State aid to American
+shipping. Now was agitated the institution of a general subsidy system
+as a means of fostering the rehabilitation of the merchant marine of all
+classes in ocean service, sailing-ships as well as steamers. The
+situation had become acute. Through the great loss of tonnage in the
+Civil War, and through the steadily advancing change from wood to iron
+in ship construction and from sail to steam propulsion, the American
+merchant marine had been brought distressingly low. From 1861, when the
+United States was standing second in rank among the nations in the
+extent of her ocean tonnage, to 1866, this tonnage had declined from
+2,642,648 to 1,492,926 tons: a loss of more than forty-three per cent;
+while England, the first in rank and chief competitor, had in the same
+period gained 986,715 tons, or more than forty per cent. Moreover, of
+this increase in English tonnage, a large percentage had been in
+steamers, one ton of which class was estimated to be equal in
+efficiency to three tons of sailing-ships; while, by substituting
+largely iron for wood, England had gained a still further advantage in
+her much larger class of iron vessels, doubly as durable as those of
+wood.[HD]
+
+The matter was brought up in Congress by a resolution of the House,
+March 22, 1869, calling for the appointment of a select committee, "to
+inquire into and report at the next session of Congress the causes of
+the great reduction of American tonnage engaged in the foreign carrying
+trade, and the great depression of the navigation interests of the
+country; and also to report what measures are necessary to increase our
+ocean tonnage, revive our navigation interests, and regain for our
+country the position it once had among the nations as a great maritime
+power." Of this committee Representative John Lynch of Maine was made
+chairman.
+
+The committee gave a series of hearings mainly in Atlantic seaboard
+cities, and submitted their report on February 17, 1870, accompanied by
+two bills recommended for passage; the one, a bounty bill, the other,
+relative to tonnage duties. With these measures the history of years of
+effort to establish the principle of general ship-subsidies in the
+American economic system properly begins.
+
+The Lynch bounty bill, entitled "An act to revive the navigation and
+commercial interests of the United States," made provision for the
+remission of duties upon the raw materials entering into the
+construction of sailing and steam-ships; for the taking in bond, free of
+duty, of all stores used in vessels in sailing to foreign ports; and for
+bounties, or subsidies, to American sailing and steam-ships engaged in
+foreign commerce, already built as well as to be built: the aid being
+extended to those already built because they had been sailed during the
+Civil War and since "at great disadvantage."[HE] The amount of duties to
+be remitted was to be equal to the amount per ton collected on the
+materials required for certain defined classes of ships: on wooden
+vessels, eight dollars a ton; on iron, twelve dollars a ton; on
+composite vessels (vessels composed of iron frames and wooden
+planking), twelve dollars a ton; on iron steamers, fifteen dollars a
+ton. Where American materials were used in the construction of iron or
+composite vessels, allowance was to be made of an amount equivalent to
+the duties imposed on similar articles of foreign manufacture. The
+bounties were thus classified: to owners of American registered ships
+engaging for more than six months in a year in the carrying trade
+between America and foreign ports, or between ports of foreign
+countries, a dollar and a half per ton upon a sailing-ship each year so
+engaged, and a dollar and a half upon a steamer running to and from the
+ports of the British North American provinces; four dollars upon a
+steamer running to and from any European port; and three dollars to and
+from all other foreign ports.[HF]
+
+The intent of the second bill, "imposing tonnage duties and for other
+purposes," was the readjustment of the existing tax upon tonnage so that
+it should fall "more equitably upon the different classes of vessels
+affected thereby."[HF] It removed all tonnage, harbor, pilotage, and
+other like taxes imposed upon shipping by State and municipal authority
+(except wharfage, pierage, and dockage); and imposed a duty of thirty
+cents per ton on all ships, vessels, or steamers entered in the United
+States.
+
+The committee's measures were ably advocated, but they finally went down
+in defeat.
+
+       *       *       *       *       *
+
+In 1872 the Pacific Mail Steamship Company came forward with an offer to
+add another monthly mail-steamship service to Japan and China, for an
+additional subsidy of a half million dollars a year. At the same session
+a project to establish a subsidized line to Australia was introduced;
+another, for a subsidized line from New Orleans to Cuba. These failed,
+while the scheme of the Pacific Mail won. A bill authorizing such
+contract was enacted June 1, that year, after prolonged and warm
+debates, and by close votes in House and Senate. Two years afterwards it
+was discovered that bribery had been employed in securing the passage of
+that act; the charge being that a million dollars had been spent by a
+corrupt lobby in pushing the bill through.[HG] Upon these disclosures,
+and because the company had failed to fulfil its conditions, Congress,
+by act of March 3, 1875, abrogated the contract.[HH] In 1877 the first
+contract with the Pacific Mail for the Japan and China service, expired.
+During its ten years' term the company had received from the Government
+a total of $4,583,333.33.[HI]
+
+With the Pacific Mail exposure the word subsidy became unsavory to the
+public taste, and for some years after no subsidy measure, however
+carefully guarded or respectably backed, could find favor in Congress. A
+second project for subsidizing a new line to Brazil, proposed by John
+Roach, the noted American shipbuilder, in 1879, was among those
+ventured, only to fail.
+
+       *       *       *       *       *
+
+A decade later, in 1889, when conditions seemed to be growing more
+propitious, the subject was revived with vigor by the introduction of a
+navigation subsidy bill proposed by the American Shipping League.[HJ]
+From this evolved in 1890 a tonnage bounty bill reported in the House by
+Representative James M. Farquhar of New York.[HK] The final outcome,
+indirectly, of these moves was the reëstablishment of the postal subsidy
+system, abandoned in 1858, in the enactment March 3, 1891, of what is
+known as the Postal Aid Law.
+
+This one ship-subsidy law now on the statutes was in its original draft
+one of two proposed measures, termed respectively the Mail Ship Bill and
+the Cargo Ship Bill, both reported in the Senate by Senator William P.
+Frye of Maine. The Cargo Bill provided for navigation bounties to
+sailing-ships and steamers. The objects of these measures, as stated by
+the promoters, were "(1) to secure regular and quicker service to
+countries now reached; (2) to make new and direct commercial exchanges
+with countries not now reached; (3) to develop new and enlarge old
+markets in the interest of producers and consumers under the
+reciprocity treaties completed and under consideration; (4) to assist
+the promotion of a powerful naval reserve; (S) to establish a
+training-school for American seamen."[HL]
+
+Both bills passed the Senate, but the House rejected the Cargo Bill and
+passed the Mail Bill only after amending it essentially. The subsidy
+rate was cut one-third on steamers of the first class--the highest class
+of ocean liners,[HM]--and was reduced on the second class. The act as
+finally approved comprises the following features:
+
+Empowering the postmaster-general to contract for terms of from five to
+ten years with American citizens for carrying the mails on American
+steamships between ports of the United States and ports in foreign
+countries, the Dominion of Canada excepted; the service on such lines
+"to be equitably distributed among the Atlantic, Mexican Gulf, and
+Pacific ports." Proposals to be invited by public advertisement three
+months before the letting of a contract; and the contract to go to the
+lowest responsible bidder. The steamships employed, to be
+American-built, owned and officered by American citizens; and the
+following proportion of the crews American citizens, to wit: "during the
+first two years of each contract, one-fourth thereof; during the next
+three succeeding years, one-third thereof; and during the remaining time
+of the continuance of such contract, at least one-half thereof." The
+subsidized steamships are ranked in four classes: in the first class,
+iron or steel screw steamships, capable of making a speed of twenty
+knots an hour at sea of ordinary weather, and of a gross tonnage of not
+less than 8,000 tons; second class, iron or steel, speed of sixteen
+knots, 5,000 tons; third class, iron or steel, fourteen knots, 2,500
+tons; fourth class, iron or steel, or wooden, twelve knots, 1,500 tons.
+Only those of the first class eligible to the contract service between
+the United States and Great Britain. All except the fourth class to be
+constructed under the supervision of the Navy Department, with
+particular reference to prompt and economical conversion into auxiliary
+cruisers, of sufficient strength and stability to carry and sustain at
+least four effective rifled cannon of a calibre of not less than six
+inches; and to be of the highest rating known to maritime commerce.
+
+The subsidy, or rate of compensation, as it is termed, for mail-carriage
+is thus fixed in each class: first class, not exceeding four dollars (in
+the original draft six dollars) a mile; second class, two dollars a
+mile, by the shortest practicable route for each outward voyage; third
+class, one dollar a mile; fourth class, two-thirds of a dollar a mile
+for the actual number of miles required by the Post Office Department to
+be travelled on each outward bound voyage. Pro rata deductions from the
+compensations, and penalties, are imposed for omission of a voyage or
+voyages, and for delays or irregularities in service. No steamship in
+the contract service is to receive any other bounty or subsidy from the
+national treasury. Sanction is given to naval officers to volunteer for
+service on the contract mail steamships; and, while so employed, they
+are to receive furlough pay in addition to their steamship pay, provided
+they are required to perform such duties as appertain to the merchant
+service. The training-school for seamen is established by a provision
+requiring that the contract steamers "shall take cadets or apprentices,
+one American-born boy for each thousand tons gross register, and one for
+each majority fraction thereof, who shall be educated in the duties of
+seamanship, rank as petty officers, and receive such pay for their
+services as may be reasonable."[HN]
+
+The first advertisements for proposals under this act resulted in
+contracts with eleven existing lines, of the third and fourth classes.
+No bids were received for the North Atlantic service calling for
+American-built steamships in the first class. But an offer was made by
+the American Line[HO] to begin the performance of the service with two
+British-built liners--the _City of New York_ and the _City of
+Paris_--acquired from the Inman Line, if these steamers were admitted
+to American registry, the company agreeing immediately to order two
+similar ships from American shipyards and add these to their fleet. The
+proposition was accepted, and a supplementary act was passed (May 10,
+1892), legalizing such registry.[HP] The new American ships were
+promptly built,--the _St. Louis_ and the _St. Paul_, launched November,
+1894, and April, 1895, respectively,--each 11,600 tons, "larger,
+swifter, safer, and more luxurious"[HQ] than the two British-built
+vessels: a perfection of workmanship deemed a matter for congratulation
+by patriotic Americans. To this extent at least the subsidy law was
+declared to have been beneficent.
+
+It had become evident, however, that the law was not fostering the
+establishment of new American-owned and American-built steamship lines
+as its promoters had hoped. In 1893 the contract service had been
+reduced by the discontinuance of three of the routes. In 1894 only three
+contracts were in operation. Up to 1898 no lines had been established on
+the Pacific under the law.
+
+In the judgment of the subsidy advocates the law's failure to produce
+the anticipated results only proved its inadequacy in not providing
+enough subsidy. Accordingly, further measures were proposed affording a
+more generous supply.
+
+In December, 1898, Senator Mark Hanna, of Ohio, brought forward a bill
+providing liberal navigation and speed bounties to all American vessels
+engaged in the foreign trade. This measure, as defined by its title,
+proposed "to promote the commerce and increase the foreign trade of the
+United States, and to promote auxiliary cruisers, transports, and seamen
+for Government use when necessary." The subsidy was again termed
+"compensation." It was to be payable on gross tonnage for mileage sailed
+both outward and homeward bound, according to speed. The rate to
+steamships showing on trial test a speed above fourteen knots was to
+increase proportionately; sailing-ships and steamers of less trial speed
+than fourteen knots, were to receive the lowest rate. This was fixed at
+one dollar and fifteen cents per gross ton for each hundred of the
+first fifteen hundred miles sailed both outward and homeward bound, and
+one cent per gross ton for each hundred miles over one hundred miles
+both ways. The additional speed bounties ranged from one cent per gross
+ton for steamers of 1,500 tons and speeding fourteen knots, to 3.2 cents
+for those over 10,000 tons and showing twenty-three knots. The act was
+to be in force for a term of twenty years, and no contracts were to be
+made under it after ten years.
+
+The Hanna bill met strong opposition, and was finally dropped. A
+substitute measure, drawn by Senator Frye, of Maine, took its place.
+This also was lost with the adjournment of the Fifty-seventh Congress.
+At the opening of the next Congress, in December, 1901, Senator Frye
+introduced his bill in an amended form. This offered subsidies to
+contract mail-steamships based upon tonnage and speed, and practically
+restored the rates of the original Postal Aid Bill. It further provided
+a fixed subsidy upon tonnage to other American steamers and
+sailing-ships, registered, and to be built in the United States. The
+bill passed the Senate, but failed with the House.
+
+       *       *       *       *       *
+
+In 1903 the matter was taken up with greater vigor, by President
+Roosevelt. In his annual message to Congress December 7, the President,
+"deeply concerned at the decline of our ocean fleet and the loss of
+skilled officers and seamen," recommended the appointment by Congress of
+a joint commission to investigate and report at the next session, "what
+legislation is desirable or necessary for the development of the
+American merchant marine and American commerce, and, incidentally, of a
+national ocean mail service of adequate auxiliary naval cruisers and
+naval reserves."
+
+In response Congress by act of April 28, 1904, created the Merchant
+Marine Commission with power to make the broadest kind of an inquiry.
+This body was composed of five Senators and five Representatives, two of
+the Senators and two of the Representatives members of the minority
+party. Senator Jacob H. Gallinger of New Hampshire was chairman. Eight
+months between the adjournment and reassembling of Congress was devoted
+to its appointed task. All the larger ports of the country were visited,
+its itinerary embracing the principal cities on the North Atlantic
+seaboard, on the Great Lakes, on the Pacific coast, and on the southern
+coast and Gulf of Mexico. Hearings were given in all these places to
+hundreds of citizens: commercial bodies, shipbuilders, shipowners,
+shipping merchants, merchants in general trade, manufacturers, bankers,
+lawyers, editors, doctrinaires. So wide indeed was the investigation,
+and so liberal the "open door" rule, admitting for consideration any
+"intelligent suggestion offered in good faith," that "alien agents" of
+foreign steamships were heard with the rest.[HR] While differences of
+opinion as to methods and policies naturally were encountered, the
+commission declared that it found public sentiment, as this was sounded
+throughout the United States, "practically unanimous not in merely
+desiring, but in demanding an American ocean fleet, built, owned,
+officered, and so far as may be, manned by our own people." This
+sentiment was "just as earnest on the Great Lakes ... as on either
+ocean."[HR]
+
+The results of the investigation were embodied in an elaborate report,
+comprising majority and minority reports of the commission, and the mass
+of testimony taken at the hearings: the whole filling three large
+pamphlet volumes, in all of nearly two thousand pages.[HS]
+
+The majority reported a bill. This was presented as merely an extension
+of the principles of the Postal Aid Act of 1891, involving "no new
+departure from the established practice of the Government." Its ocean
+mail sections were intended "simply to strengthen the existing act on
+lines where it has happened to prove inadequate." The subsidies which it
+granted were termed, inoffensively, "subventions," and its promoters
+protested that these "subventions" were "not in any opprobrious sense a
+subsidy or bounty." They were "not bounties outright, or mere commercial
+subsidies such as many of our contemporaries give." They were "granted
+frankly in compensation for public services rendered and to be
+rendered."[HT]
+
+The proposed measure, however, was more than an extension of the act of
+1891. Its scope was indicated by its title: "To promote the national
+defence, to create a force of naval volunteers, to establish American
+ocean mail lines to foreign markets, to promote commerce, and to provide
+revenue from tonnage." The subsidies offered comprised mail subventions
+to steamships; subventions to general cargo carriers and deep-sea
+fishing-ships, both steam and sail; and retainers to officers and men of
+American merchant ships and deep-sea fishing vessels enrolling as naval
+volunteers. It opened with provisions for the establishment of a naval
+reserve.
+
+The new mail subsidies provided for ten specified lines of "steamships
+of the United States" of sixteen, fourteen, thirteen, and twelve knots
+speed, to the greater countries of South America, to Central America, to
+Africa, and to the Orient, with a total maximum subsidy for the ten
+lines of $2,665,000 a year. In all contracts it was to be specified that
+the steamships must carry in their own crews a certain increasing
+proportion, up to one-fourth, of men enrolled as naval volunteers. The
+subventions to American general cargo carriers, or the "tramp" type of
+ships, and deep-sea fishing-vessels, steam or sail, were fixed at these
+rates: those engaged in the foreign trade for a full year, five dollars
+per gross ton; so engaged for nine months and less than a year, four
+dollars; for six months, two dollars. These subsidies were conditioned
+upon these requirements: the employment in the crews of a certain
+proportion of naval volunteers; one-sixth of the crews to be citizens of
+the United States or "men who have declared their intentions to become
+citizens;" ships to carry the mails when required free of charge; all
+ordinary repairs to be made in the United States; the ships to be in
+readiness for Government taking for naval service in time of need. The
+payments in this class were to be made on contracts for a year at a
+time, renewable from year to year; and no vessel was to receive them for
+a longer period than ten years. The retainers to officers and men of the
+merchant marine and deep-sea fishing-ships as inducements to enroll as
+naval volunteers, were fixed at rates ranging from a hundred dollars a
+year for the master or chief engineer of a large steamship to
+twenty-five dollars for a sailor or fireman, and fifteen dollars for a
+boy, these retainers being independent of their regular pay. The
+provisions relating to tonnage revenue increased the tonnage taxes on
+all vessels, American and foreign, entering American ports, with a
+rebate of eighty per cent of the tonnage duties allowed to American
+ships carrying American boys as apprentices and training them in
+seamanship or engineering for the merchant service and naval
+reserve.[HU]
+
+The minority report, signed by three of the four Democratic members of
+the commission, although outlining measures of relief which, in the
+judgment of the signers, would "accomplish substantial and permanent
+good without injustice to any other American interest and without doing
+violence to any fundamental principle of right or of organic law,"
+proposed no bill. While the minority "saw objections to the entire bill"
+recommended by the majority, they were disposed to withhold any
+opposition except to the sections providing for direct subsidies. These
+they declared to be "so obnoxious to Democratic principles and to the
+economic sense of the country" that they were compelled to enter their
+"earnest protest against their enactment into law." Instead of
+subsidies, the remedial legislation which they outlined included: a
+return to the discriminating-duty policy; and the putting on the free
+list of all materials which enter into the construction of ships no
+matter whether intended for foreign or domestic trade,--thus admitting
+ships built from foreign materials, in whole or in part, to the
+coastwise trade, from which they are now excluded. The minority held
+also that it would probably "be necessary to remove the duties not only
+for materials but from all materials sold cheaper abroad than at home,"
+meaning steel and iron products. "In this way, and in this way only,
+will our shipbuilders be enabled to obtain our materials at the prices
+at which they are sold to foreign shipbuilders."[HV]
+
+The report of the commission was submitted to the Fifty-eighth Congress,
+third session, January 4, 1905.[HW] No action was had on the bill in
+that Congress. It was referred to the committee on commerce; reported
+back to the Senate with sundry amendments and a minority report against
+it;[HX] was debated tentatively; and finally passed over at the request
+of its sponsor, Senator Gallinger, who expressed himself as satisfied
+that the bill could not receive the consideration it deserved at that
+session. Meanwhile both Houses had directed a continuance of the
+commission's inquiry. In May the chairman, Senator Gallinger, held
+conferences in New York with several representatives of the shipping
+interests who had not been heard; and later sessions were held in
+Washington, at which other statements were received and considered.
+
+At the opening of the Fifty-ninth Congress, December 4, 1905, Senator
+Gallinger submitted a supplementary report of the commission, and with
+it introduced a new bill--the previous bill in a new draft.[HY] At the
+same time Representative Charles H. Grosvenor, of Ohio, the first House
+member of the commission, introduced the bill to the House.
+
+This draft added several new features to the original bill. The most
+important were provisions for increasing the subsidies payable under the
+law of 1891 to the single American contract line to Europe, and to the
+Oceanic Line from San Francisco to Auckland and Sydney. These provisions
+added two hundred and fifty thousand dollars to the former's subsidy of
+seven hundred and fifty thousand, and two hundred and seventeen thousand
+to the latter's of two hundred and eighty-three thousand. The reasons
+given for these increases were: in the case of the American Line,
+because this line "meets the fiercest competition of the State-aided
+corporations of Europe, soon to be intensified by the new subvention of
+one million one hundred thousand dollars granted to the Cunard Company
+by the British Government, on terms so liberal as to make it equivalent
+to one and a half million dollars a year"; and in the case of the
+Australasia Line, because it "operates in Pacific waters where cost of
+fuel, labor, etc., is considerably greater than at Atlantic ports; ...
+is required to maintain a very high speed; ... employs exclusively white
+crews instead of the Asiatics utilized by many other Pacific companies."
+Another provision, as a special encouragement for American shipowners to
+enter the Philippine trade, added a subvention of thirty per cent above
+the regular rate, or six and a half dollars a ton. The naval volunteer
+retainers were extended to seamen of the Great Lakes and coastwise
+trade.[HZ]
+
+In the Senate the bill fared well as a whole. Like the original bill it
+came back from the committee on commerce amended, though slightly, and
+with a minority report against it: the minority again emphasizing their
+"unqualified opposition to this renewed effort to donate to certain
+favored interests moneys collected by the Government for public purposes
+under its power of taxation."[IA] It was closely fought by the
+opposition in debate, opened with Senator Gallinger's argument in its
+behalf on January 8, 1906. But it successfully ran the gauntlet. Further
+amended in several particulars, but unscathed in its essential parts, it
+passed the Senate, February 14, by a vote of 38 to 27, five Republican
+Senators and all the Democrats voting in the negative.[IB]
+
+In the House its progress was less prosperous. It lay with the committee
+on merchant marine and fisheries into the second session of this
+Congress; and more hearings were given. Reframed after the enacting
+clause, but practically the same in principle, it was reported back
+January 19 (1907) by Mr. Grosvenor, accompanied by an explanatory
+report of the majority of the committee;[IC] and bill and report were
+referred to the whole House on the state of the Union. Later the views
+of the minority were filed.[IC] On January 23 a message from President
+Roosevelt in behalf of the measure was received. The president
+particularly urged the "great desirability of enacting legislation to
+help American shipping and American trade by encouraging the building
+and running of lines of large and swift steamers to South America and
+the Orient." As striking evidence of the "urgent need of our country's
+making an effort to do something like its share of its own carrying
+trade on the ocean," he directed attention to the address of Secretary
+Root before the Trans-Mississippi Commercial Congress at Kansas City,
+Mo., the previous November, giving the results of the secretary's
+experiences on his recent South American tour. The proposed law, Mr.
+Roosevelt repeated, was in no sense experimental. It was "based on the
+best and most successful precedents, as for instance on the recent
+Cunard contract with the British Government." So far as South America
+was concerned, its aim was to "provide from the Atlantic and Pacific
+coasts better American lines to the great ports of South America than
+the present European lines." Under it "our trade friendship" would "be
+made evident to the South American Republics."[ID]
+
+Backed by the explanatory report and this message, the friends of the
+measure opened the debate, February 25, Mr. Grosvenor leading. It was a
+great debate, long and hot. Numerous amendments were put in; some
+changing the proposed routes, others adding new ones. At length on March
+1, three days before the end of this Congress, the much amended bill was
+passed, and went back to the Senate for concurrence.[IE]
+
+As it now stood it was shorn of the provisions for lines from the
+Pacific coast to Japan, China, the Philippines, and Australasia. The new
+subsidized lines were all to run to South America. Two of these were to
+run from the Atlantic coast to Brazil and Argentina, respectively; one,
+from the Pacific coast to Peru and Chile; and one from the Gulf of
+Mexico to Brazil. On all four lines sixteen-knot steamers were required,
+with speed on the average above the European mail lines to South
+America. The subsidies were reserved exclusively to ships to be built in
+the United States, so that the mail service could not be performed by
+existing steamers; thus a wholly new ocean-mail fleet was
+guaranteed.[IF]
+
+The bill was reached in the Senate March 2, and strenuous efforts were
+made by Senator Gallinger and others to push it through. But it failed
+in the closing hours of the session to reach a vote. So this measure
+fell.[IG]
+
+Another effort was made in the Sixtieth Congress. In his message at the
+beginning of this Congress (December 2, 1907) President Roosevelt
+recommended an amendment to the act of March 3, 1891, "which shall
+authorize the postmaster-general in his discretion to enter into
+contracts for the transportation of mails to the Republics of South
+America, to Asia, the Philippines, and Australia at a rate not to exceed
+four dollars a mile for steamships of sixteen-knots speed or upward,
+subject to the restrictions and obligations" of that act. In other
+words, to give the same subsidy to steamers in these services as allowed
+to the twenty-knot American mail transatlantic line, instead of two
+dollars a mile.[IH] A bill to this effect was introduced in the Senate
+December 4[II]; on February 3, 1908, was reported back from the
+committee on commerce so amended as to provide the four-dollar-a-mile
+subsidy to American sixteen-knot steamers on routes of four thousand
+miles or more to South America, the Philippines, Japan, China, and
+Australasia; was debated at length; further amended; and finally,
+passed, March 20. In the House it was referred to the committee on post
+office and post roads;[IJ] issued therefrom in a dew draft;[IK] debated;
+and finally failed to pass. Thereupon the subsidized service to
+Australia by way of Honolulu and the Samoan group was abandoned.
+
+Again the measure was pressed in the Sixty-first Congress. It now had
+the backing of President Taft. In his annual message December 9, 1909,
+"following," as he graciously said, "the course of my distinguished
+predecessor," he earnestly recommended the passage of a "ship-subsidy
+bill looking to the establishment of lines between our Atlantic seaboard
+and the eastern coast of South America, China, Japan, and the
+Philippines." The bill, as introduced by Senator Gallinger (February 23,
+1910), provided for subsidized lines of the second and third classes on
+routes to the points named by Mr. Taft, four thousand miles or more in
+length outward voyage, or on routes to the Isthmus of Panama: the second
+class to receive the subsidy rate per mile provided in the law of 1891
+for steamers of the first class, and the third class the rate applicable
+to the second class. If no contract should be made for a line between a
+Southern port and South American ports, and two or more should be
+established from Northern Atlantic ports, it was required that one of
+the latter should touch outward and homeward at two ports of call south
+of Cape Charles. The total expenditure for foreign mail-service in any
+one year was limited--not to exceed the estimated revenue therefrom for
+that year.[IL]
+
+The bill came back from the committee on commerce in March without
+amendment, and with a report.[IM] In June it was put over for
+consideration in December of the third session of this Congress. When at
+length it was reached, Senator Gallinger submitted a substitute. This,
+instead of naming the points to be covered, provided for subsidized
+routes to South America south of the equator outward voyage; provided
+for one port of call instead of two on the Southern Atlantic coast;
+guarded against "discrimination detrimental to the public interest," in
+other words "combines," by a provision that no contract be awarded to
+any bidder engaged in any competitive transportation business by rail,
+or in the business of exporting or importing on his own account, or
+bidding for or in the interest of any person or corporation engaged in
+such business, or having control thereof through stock ownership or
+otherwise; and fixed the limit of the total expenditure for foreign mail
+service in any one year at four million dollars. This substitute was
+finally passed on February 12, 1911, by a vote of 39 to 39, the chairman
+casting his vote in the affirmative. In the House the measure went to
+the committee on post office and post roads; and there rested.
+
+Various other subsidy bills and measures for the revival of the ocean
+merchant marine without subsidies, were put into this Congress, as in
+previous ones, but few escaped from the committees; and these few fell
+short of passage.
+
+FOOTNOTES:
+
+[Footnote FS: Wells, chaps. 4 and 5, pp. 58-94. Also Rept. of
+commissioner of navigation for 1909.]
+
+[Footnote FT: U.S. Statutes at Large. Also Rept. of commission of
+navigation, 1909.]
+
+[Footnote FU: Marvin, pp. 240-241.]
+
+[Footnote FV: U.S. Statutes at Large, vol. V, p. 748.]
+
+[Footnote FW: This contract in Executive Document, 30th Cong., 1st sess,
+no. 50.]
+
+[Footnote FX: U.S. Statutes at Large, vol. IX, p. 152.]
+
+[Footnote FY: Meeker.]
+
+[Footnote FZ: U.S. Statutes at Large, vol. IX, p. 187.]
+
+[Footnote GA: Meeker.]
+
+[Footnote GB: For the Sloo contract see Exec. Does., 32nd Congr., 1st
+sess., no. 91.]
+
+[Footnote GC: For this contract see Exec. Docs., 32nd Cong., 1st sess.,
+no. 91.]
+
+[Footnote GD: Meeker. This contract in Exec. Docs., 32nd Cong., 1st
+sess., no. 91, pp. 71-74.]
+
+[Footnote GE: Navy appropriation bills, Aug. 3, 1848, March 3, 1849.]
+
+[Footnote GF: U.S. Statutes at Large, vol. IX, p. 188.]
+
+[Footnote GG: Exec. Docs., 30th Cong., 1st sess., no. 51.]
+
+[Footnote GH: Exec. Docs., 30th Cong., 1st sess., no. 51.]
+
+[Footnote GI: Marvin, p. 243.]
+
+[Footnote GJ: Meeker.]
+
+[Footnote GK: Report in the Senate Sept. 18, 1850, in Exec. Docs., 32nd
+Cong., 1st sess., no. 91, pp. 14-15.]
+
+[Footnote GL: Meeker.]
+
+[Footnote GM: For contract see Exec. Docs., 32nd Cong., 1st sess., no.
+91, pp. 154-157.]
+
+[Footnote GN: Exec. Docs., 32nd Cong., 1st sess., no. 91, pp. 5-7.]
+
+[Footnote GO: Marvin, p. 247. The measurement of these steamers is
+differently given by Spears: p. 26. "When done, the ships were found to
+have fine models--they rode the waves in a way that excited the
+admiration of all sailors. But the keelsons under the engines were only
+40 inches deep, while the keels were 277 ft. long, and there was 'give'
+enough to rack the engines to pieces." Spears, p. 267.]
+
+[Footnote GP: Meeker.]
+
+[Footnote GQ: U.S. Statutes at Large, vol. XI, p. 101; chap. CLXI, Aug.
+18, 1856.]
+
+[Footnote GR: Same appropriation act for ocean steamship service, June
+14, 1858.]
+
+[Footnote GS: Marvin, p. 279.]
+
+[Footnote GT: Meeker gives the details as follows: Bremen line (1847-57)
+$2,000,000; Havre line (1852-57) $750,000; Collins line (1850-58)
+$4,500,000; New York to Aspinwall (1848-58) $2,900,000; Astoria and San
+Francisco to Panama (1848-58) $3,750,000; Charleston to Havana (1848-58)
+$500,000.]
+
+[Footnote GU: Marvin, p. 253.]
+
+[Footnote GV: Bates, p. 133.]
+
+[Footnote GW: Same, p. 143.]
+
+[Footnote GX: Marvin, p. 254.]
+
+[Footnote GY: George Frisbie Hoar.]
+
+[Footnote GZ: Marvin, p. 258.]
+
+[Footnote HA: Bates, p. 142.]
+
+[Footnote HB: United States Statutes at Large, vol. XIII, p. 93.]
+
+[Footnote HC: Session of 1866-67.]
+
+[Footnote HD: Report of the select committee on the merchant marine, in
+Repts. of Committee, 1870, 41st Cong., 2d Bess., House Kept., no. 28.]
+
+[Footnote HE: House Rept., no. 2378, 51st Cong., 2nd sess.]
+
+[Footnote HF: House Report, no. 28, 41st Cong., 2d sess.]
+
+[Footnote HG: House Docs., no. 598, also Miscellaneous Docs.; nos. 74
+and 255, 42d Cong., 2nd sess.]
+
+[Footnote HH: House Docs., no. 268, 43rd Cong., 1st sess.]
+
+[Footnote HI: Meeker.]
+
+[Footnote HJ: House Docs., Rept., no. 601, 51st Cong., 1st sess.]
+
+[Footnote HK: Text of this bill in Bates, pp. 411-416.]
+
+[Footnote HL: House Rept., no. 3273, 51st Cong., 2d sess.]
+
+[Footnote HM: Marvin, p. 414.]
+
+[Footnote HN: United States Statutes at Large, vol. XXVI, p. 830.]
+
+[Footnote HO: Originally the International Navigation Company
+established in Philadelphia in 1871, and beginning service between
+Philadelphia and Liverpool with four American-built steamships.]
+
+[Footnote HP: United States Statutes at Large, vol. XXVII, p. 27.]
+
+[Footnote HQ: Marvin, p. 421.]
+
+[Footnote HR: Report of The Merchant Marine Commission (1904), vol. I,
+p. III.]
+
+[Footnote HS: Report of The Merchant Marine Commission, together with
+the testimony taken at the Hearings, 3 Vols., p. 1985; Senate Report,
+no. 2755, 58th Cong., 3d sess.]
+
+[Footnote HT: Same: Report of the majority, vol. I, pp. XXIII, XXX,
+XXXI.]
+
+[Footnote HU: This bill in Report of the Merchant Marine Commission,
+vol. I, pp. XLVI, LI.]
+
+[Footnote HV: Rept. of The Merch. Marine Com., Views of the Minority,
+Vol. I, p. LVI.]
+
+[Footnote HW: Senate bill, 6291, 58th Cong., 3d sess.]
+
+[Footnote HX: Senate Report no. 2949, 58th Cong., 3d sess.]
+
+[Footnote HY: Senate Report no. 1, 59th Cong., 1st sess.]
+
+[Footnote HZ: Senate Report no. I, 59th Cong., 1st sess. This bill is
+Senate no. 529.]
+
+[Footnote IA: Senate Report no. 10, 59th Cong., 1st sess.]
+
+[Footnote IB: Cong. Record, vol. 40, part I, 59th Cong., 2d sess.]
+
+[Footnote IC: House Report no. 6442, 59th Cong., 2d sess.]
+
+[Footnote ID: House Doc. no. 4638, 59th Cong., 2d sess.]
+
+[Footnote IE: Cong. Record, vol. 41, part 5, 59th Cong., 2d sess., p.
+4378.]
+
+[Footnote IF: Cong. Record, 59th Cong., 2d sess., p. 4688.]
+
+[Footnote IG: Same, p. 4653.]
+
+[Footnote IH: Senate Report no. 168, 60th Cong., 1st sess.]
+
+[Footnote II: Senate bill no. 28, 60th Cong., 1st sess.]
+
+[Footnote IJ: Cong. Record, 65th Cong., p. 3743.]
+
+[Footnote IK: House bill no. 22301, 60th Cong., 1st sess.]
+
+[Footnote IL: Senate bill no. 6708, 60th Cong., 2d Sess.]
+
+[Footnote IM: Senate Report no. 354, same.]
+
+
+
+
+CHAPTER XIV
+
+SUMMARY
+
+
+Ship subsidies, open or concealed, are now granted by nearly every
+maritime nation. Whatever may be the designation of these Government
+grants,--whether mail subsidies, naval subventions, retaining fees for
+possible naval service, construction bounties, navigation bounties,
+trade bounties, Government loans, Government partnerships, tariff
+advantages, canal refunds,--whatever may be their form, all are
+distinctly Government aids, direct or indirect, the primary object of
+which is the development and expansion of the merchant marine of each
+nation granting them; and generally, if not universally, the upbuilding
+of this marine for service in time of need as an auxiliary to the
+national navy.
+
+Summarized, the various grants of the various nations thus appear:
+
+_Great Britain_ grants mail subsidies, and admiralty subventions; her
+colonies, steamship subsidies.
+
+_France_: mail subsidies; construction and navigation bounties;
+fisheries bounties.
+
+_Germany_: mail subsidies; steamship subsidies; preferential rates on
+the State railroads for shipbuilding materials.
+
+_Belgium_: premiums to certain steamship lines; pilotage refunds.
+
+_Austria-Hungary_: mail subsidies; construction and navigation bounties;
+Suez Canal refunds. Hungary; bounties to Hungarian ships.
+
+_Italy_: mail subsidies; construction and navigation bounties.
+
+_Spain_: mail subsidies; construction and navigation bounties.
+
+_Portugal_: mail subventions to steamship companies.
+
+_Denmark_: trade subsidies; exemptions from harbor dues.
+
+_Sweden_: State contributions--loans to steamship companies.
+
+_Norway_: State contributions; trade subsidies.
+
+_Russia_: mail subsidies; mileage subsidies; Government loans; steamship
+subsidies; Suez Canal refunds.
+
+_Japan_: State aid to steamship companies; mail subsidies; construction
+and navigation bounties; fisheries bounties.
+
+_China_: State aid to steamship companies; subsidies to ship-yards.
+
+_South America_: Brazil and Argentina, subsidies to foreign steamship
+companies.
+
+_United States_: mail subsidies to seven steamship lines.
+
+The United States confines the coastwise trade to American ships, and
+these are exempted from tonnage dues. It excludes foreign-built ships
+from American registry, admitting only American ships, or those taken in
+war as prizes or forfeited for a breach of United States laws, belonging
+to American citizens.[IN] Ownership of American ships is restricted to
+"citizens of the United States, or a corporation organized under the
+laws of any of the States thereof."[IO] The master of an American ship,
+and all officers in charge of a watch, including the pilots, must be
+American citizens. Since 1871 foreign materials for ship-building have
+been admitted free of duty. Since 1909 such materials, and all articles
+necessary for the outfit and equipment of ships, have been duty-free,
+with this proviso: that vessels receiving these rebates of duties "shall
+not be allowed to engage in the coastwise trade of the United States
+more than six months in any one year," except upon repayment of the
+duties remitted; and that vessels built for foreign account and
+ownership shall not engage in this trade.[IP]
+
+In 1910 the subsidized American service covered only the one
+transatlantic line from New York to Southampton, calling at Plymouth and
+Cherbourg; lines to the north coast of South America--to Venezuela; to
+Mexico; to Havana; to Jamaica; and on the Pacific, from San Francisco to
+Tahiti.
+
+The total cost of the service for the year on these seven subsidized
+routes was $1,114,603.47, a net excess over the amount allowable at
+present rates to steamers not under contract of $346,677.39, or,
+deducting the amount would have been paid non-contract steamers for the
+despatch of the foreign closed mails which these steamers carry without
+additional cost to the department, a total excess of $293,013.40.[IQ]
+"All other mail service between the United States and foreign
+countries," the postmaster-general regretfully reported, is "wholly
+dependent on steamships over whose sailings the department has no
+control."[IR]
+
+       *       *       *       *       *
+
+The total tonnage of the United States in 1910 as given by Lloyd's was
+5,058,678 tons:
+
+                              No. of vessels.     Tons.
+
+Sea                                 2774        2,761,605
+Northern Lakes                       606        2,256,619
+Philippine Islands                    89           40,454
+                                    ----        ---------
+  Total                             3469        5,058,678
+
+The number of ships on the lakes as given does not include wooden
+vessels trading on the Great Lakes. While the ocean tonnage has declined
+from more than two and a half million tons in 1861 to some eight hundred
+thousand tons, that engaged in the coastwise and inland trade has
+steadily increased for many years.[IS] On the Great Lakes especially is
+employed a fine and powerful merchant fleet.
+
+
+THE END.
+
+FOOTNOTES:
+
+[Footnote IN: Registry law of 1792, in Revised Statutes, sec. 4132.]
+
+[Footnote IO: Revised Statutes, see. 4131.]
+
+[Footnote IP: Tariff act of Aug. 5, 1909, sec. 19.]
+
+[Footnote IQ: Postoffice Department report, 1910.]
+
+[Footnote IR: Postmaster-general Hitchcock, report, 1910.]
+
+[Footnote IS: American Year Book, 1911.]
+
+
+
+
+INDEX
+
+  _Adriatic_, the steamer,
+
+  American Shipping League,
+
+  American Steamship Company,
+
+  American Year Book, _reference to_,
+
+  Anderson, Com. Gen. George E., _reference to_,
+
+  _Arctic_, the steamer,
+
+  _Argentina_, use of subsidies in,
+
+  Aspinwall, W.H.,
+
+  _Atlantic_, the steamer,
+
+  Atlantic Transport line,
+
+  _Auguste Victoria_, the steamer,
+
+  Australasia line,
+
+  Australian line,
+
+  Austria-Hungary, history of the use of subsidies in,
+    provisions for two classes of subsidies in,
+    increase in the proportion of steamers built in,
+    total of tonnage in,
+    grants of,
+
+  Austrian Lloyd Company,
+
+  Austro-American Shipping Company,
+
+  Austro-Hungarian Lloyd Company, _see_ Austrian Lloyd Company.
+
+
+  BABBITT, VICE CON. GEN. E.G., _reference to_,
+
+  _Baltic_, the steamer,
+
+  Barker, J. Ellis, _reference to his_ "Modern Germany,"
+
+  Bates, W.W., _reference to his_, "American Marine,"
+
+  Belgium, use of subsidies in,
+
+  Bismarck's Memorial to the German Reichstag, _reference to_,
+
+  Black Sea Navigation Company,
+
+  Brazil, use of subventions in,
+
+  _Britannia_, the steamer,
+
+  Brown, James,
+
+  Brown, Stewart,
+
+
+  _California_, the steamer,
+
+  Canada, granting of mail and steamship subsidies by,
+
+  Cargo Ship Bill, the,
+
+  Charleston and Havana line,
+
+  _Chargeurs Réunis_,
+
+  Chile, use of mail subsidies,
+
+  China, use of subsidies in,
+
+  Chinese Merchants' Steam Navigation Company,
+
+  _City of New York_, the steamer,
+
+  _City of Paris_, the steamer,
+
+  "Clippers," American,
+
+  Colbert, finance minister of France,
+
+  Collins, Edward K.,
+
+  Collins line, the,
+
+  _Columbia_, the steamer,
+
+  _Campagnie des Messagéries Maritimes_,
+
+  _Compagnie Fraissant_,
+
+  _Compagnie Générale Transatlantique_,
+
+  Compañia Transatlantica Española, La,
+
+  Cromwell, code of, _see_ Maritime Charter of England, Great,
+
+  Cunard, Samuel,
+
+  Cunard Company,
+
+  _Curaçoa_, the steamer,
+
+
+  DAWSON, GEN. WILLIAM, JR., _reference to_,
+
+  Denmark, granting of postal subventions and "trade" subsidies by,
+
+  Dominion line,
+
+  "Dramatic line,"
+
+  Dutch East Indian lines,
+
+
+  EAST AFRICAN LINE,
+
+  East Asian line,
+
+  England, history of the use of subsidies in,
+    first navigation law of,
+    Great Maritime Charter of,
+    Cromwell's code for,
+    competition between the United States and,
+    testing of steam for navigation in,
+    building of steamships,
+    total of subsidies paid in,
+    grants of,
+
+
+  _Falcon_, the steamer,
+
+  Farquhar, James M.,
+
+  France, history of the use of subsidies in,
+    the navigation laws of,
+    the disappearance of the domestic mercantile marine of,
+    commercial treaty between England and,
+    the Merchant Marine Act of,
+    organization of steamship companies in,
+    granting of "shipping premiums" in,
+    total cost of bounty system in,
+    capacity of, for building steamships,
+    grants of,
+
+  _Franklin_, the steamer,
+
+  Frye, William P.,
+
+
+  GAFFNEY, T. ST. J., U.S. Consul,
+
+  Gallinger, Jacob H.,
+
+  _Georgia_, the steamer,
+
+  German-Australian line,
+
+  Germany, history of the use of subsidies in,
+    first steps in domestic shipbuilding in,
+    establishment of a subsidized mail service in,
+    building of large steamships in,
+    extraordinary growth of the merchant marine in,
+    grants of,
+
+  _Great Britain_, the steamer,
+
+  _Great Western_, the steamer,
+
+  Great Western Steamship Company,
+
+  Green, John R., _reference to his_ "Short History of the English
+    People,"
+
+  Greener, Gen. R.T., U.S. Con., _reference to_,
+
+  Grosvenor, Charles H.,
+
+
+  HAMBURG-AMERICAN lines,
+
+  Hanna, Mark,
+
+  Harris, Arnold,
+
+  _Hermann_, the steamer,
+
+  Hitchcock, Postmaster-General, _reference to_ Report of,
+
+  Hoar, George Frisbie,
+
+  Holland, maritime supremacy of,
+    granting of subventions for carrying mails in,
+
+  _Humboldt_, the steamer,
+
+  Hungary, _see_ Austria-Hungary
+
+
+  _Illinois_, the steamer,
+
+  _Indiana_, the steamer,
+
+  Inman, John,
+
+  "Inman Line,"
+
+  "International Mercantile Marine Company,"
+
+  International Navigation Company, _see_ American Line
+
+  Italian General Navigation Company,
+
+  Italy, history of the use of subsidies in,
+    construction, subsidies provided for in,
+    mail subvention system of,
+    increase of tonnage in,
+    grants of,
+
+
+  JAPAN, history of the use of subsidies in,
+
+  Japan Mail Steamship Company, _see, Nippon Yusen Kaisha_, the
+
+  Japan Year Book, _reference to_,
+
+  Jwasaki Yataro, the Japanese merchant,
+
+
+  LAW, GEORGE,
+
+  Lindsay, W.H., _reference to his_ "History of Merchant Shipping,"
+    _also his_, "Our Navigation Laws,"
+
+  _Lloyd Brazileiro_, the,
+
+  Lloyd Italiano line,
+
+  Lloyd's Register, _reference to_,
+
+  _Lusitania_, the steamer,
+
+  Lynch, John,
+
+  Lynch bounty bill,
+
+
+  MACGREGOR, JOHN, _reference to his_, "Commercial Tariffs,"
+
+  Mellvaine, Bowes,
+
+  Mail Ship Bill, the,
+
+  Maritime Charter of England, Great,
+
+  Marvin, Winthrop L., _reference to his_ "American Merchant
+    Marine,"
+
+  _Mauretania_, the steamer,
+
+  Meeker, Royal, _reference to his_ "History of Ship Subsidies,"
+
+  Merchant Marine Commission, the,
+
+  Miller, Con. Gen. H.B., _reference to_,
+
+  Mills, Edward,
+
+  Mordecai, M.C.,
+
+  Morgan, J. Pierpont,
+
+  "Morgan Steamship Merger," _see_ "International Mercantile Marine
+       Company"
+
+  NAVIGATION, Report of (U.S.) commissioner of, _reference to_,
+
+  Navigation law, first English,
+
+  New Orleans packet line,
+
+  New York, Havre, and Bremen line,
+
+  New York and Chagres line,
+
+  _Nippon Yusen Kaisha_, the,
+
+  North German Lloyd line,
+
+  Norway, granting of subsidies for mail carriage by,
+
+
+  O'BRIEN; THOMAS, U.S. Ambassador, _reference to_,
+
+  Ocean Steam Navigation Company,
+
+  _Ohio_, the steamer,
+
+  _Olympic_, the steamer,
+
+  _Oregon_, the steamer,
+
+
+  _Pacific_, the steamer,
+
+  Pacific Mail Steamship Company,
+
+  Pacific Steam Navigation Company,
+
+  _Panama_, the steamer,
+
+  Parliamentary papers, _reference to_,
+
+  _Pennsylvania_, the steamer,
+
+  Portugal, granting of postal subventions and subsidies by,
+
+  Postal Aid Law, the,
+
+  Postal Ocean Steamship Company,
+
+  Preble, George H., _reference to his_, "Chronological History of
+    Steam Navigation,"
+
+  _Princeton_, sloop-of-war, the,
+
+
+  RED STAR LINE,
+
+  Ricardo, John Lewis, _reference to his_, "Anatomy of the Navigation
+    Laws,"
+
+  Roach, John,
+
+  Roberts, Marshall O.,
+
+  Roosevelt, President,
+
+  Root, Secretary,
+
+  Royal Mail Steam Packet Company,
+
+  _Royal William_, the steamer,
+
+  Russia, history of the use of subsidies in,
+    proposed granting of bounties in the form of loans,
+    increase in the fleet of,
+    grants of,
+
+  Russian Volunteer Fleet,
+
+
+  ST. GEORGE'S PACKET COMPANY,
+
+  _St. Louis_, the steamer,
+
+  _St. Paul_, the steamer,
+
+  Sammons, Thomas, U.S. Con. Gen.,
+
+  _Savannah_, the first steamer to cross the Atlantic,
+
+  Shipbuilding, in the United States,
+    in England,
+    in France,
+    in Germany,
+    in Austria-Hungary,
+    in Spain,
+    in Russia,
+    in Japan,
+    in the United States,
+
+  _Sirius_, the steamer,
+
+  Sloo, A.G.,
+
+  Skinner, Robert, U.S. Consul,
+
+  Small, Consul General, _reference to_,
+
+  Smith, U.S. Consul, _reference to_,
+
+  Snodgrass, Con. Gen. John H., _reference to_,
+
+  South America, use of subsidies in,
+
+  Spain, history of the use of subsidies in,
+
+  Spears, John R., _reference to his_ "Story of the American Merchant
+    Marine,"
+
+  Subsidy, definition of term,
+    various forms of,
+    use of, in England,
+    in Canada,
+    in France,
+    in Germany,
+    in Holland and Belgium,
+    in Austria-Hungary,
+    in Italy,
+    in Spain,
+    in Portugal,
+    in Denmark, Norway, and Sweden,
+    in Russia,
+    in Japan,
+    in China,
+    in South America,
+    in the United States,
+    summary of,
+
+  Sweden, granting of subsidies for mail carriage by,
+
+
+  TAFT, PRESIDENT,
+
+  _Tennessee_, the steamer,
+
+
+  UNION MARITIME COMPANY,
+
+  United States, competition in the overseas between England and the,
+    history of the proposed system of ship subsidies in the,
+    establishment of mail steamers in the,
+    the "clippers" of the,
+    revival of the steamship-subsidizing policy in the,
+    condition of the merchant marine in the,
+    bills in Congress relative to bounties in the,
+    grants of the,
+    ownership of ships in the,
+    subsidized service of, in 1911,
+    total tonnage of the,
+
+
+  VAN TROMP, the Dutch admiral,
+
+  Vera Cruz packet line,
+
+  Viallatés, Achille, _reference to_,
+
+
+  _Washington_, the steamer,
+
+  Wells, David A., _reference to his_ "Our Merchant Marine,"
+
+  Wheelwright, William,
+
+  White Star Line,
+
+  Wood, J.K., U.S. Consul, _reference to_,
+
+
+
+***END OF THE PROJECT GUTENBERG EBOOK MANUAL OF SHIP SUBSIDIES***
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+<meta http-equiv="Content-Type" content="text/html; charset=ISO-8859-1">
+<title>The Project Gutenberg eBook of Manual of Ship Subsidies, by Edwin M. Bacon</title>
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+<h1>The Project Gutenberg eBook, Manual of Ship Subsidies, by Edwin M. Bacon</h1>
+<pre>
+This eBook is for the use of anyone anywhere at no cost and with
+almost no restrictions whatsoever.  You may copy it, give it away or
+re-use it under the terms of the Project Gutenberg License included
+with this eBook or online at <a href = "https://www.gutenberg.org">www.gutenberg.org</a></pre>
+<p>Title: Manual of Ship Subsidies</p>
+<p>Author: Edwin M. Bacon</p>
+<p>Release Date: October 11, 2004  [eBook #13718]</p>
+<p>Language: English</p>
+<p>Character set encoding: ISO-8859-1</p>
+<p>***START OF THE PROJECT GUTENBERG EBOOK MANUAL OF SHIP SUBSIDIES***</p>
+<br><br><h3>E-text prepared by Audrey Longhurst<br>
+            and the Project Gutenberg Online Distributed Proofreading Team</h3><br><br>
+<hr class="pg" noshade>
+<br>
+<br>
+<br>
+<br>
+
+
+
+
+<h1><a name='Page_1'></a>MANUAL OF SHIP SUBSIDIE<a name='Page_2'></a><a name='Page_3'></a>S</h1>
+<br />
+
+<h2>AN HISTORICAL SUMMARY OF THE SYSTEMS OF ALL NATIONS</h2>
+
+<h3>BY</h3>
+
+<h2>EDWIN M. BACON, A.M.</h2>
+
+<h4>1911</h4>
+
+<br>
+<br>
+<br>
+<hr style='width: 65%;' />
+
+<br />
+
+<h2><a name='Page_5'></a>CONTENTS</h2>
+
+<pre>
+CHAPTER                          PAGE<br />
+        <a href='#PREFACE'>PREFACE</a>                     <a href='#PREFACE'>7</a>
+I       <a href='#CHAPTER_I'>INTRODUCTORY</a>                <a href='#CHAPTER_I'>9</a>
+II      <a href='#CHAPTER_II'>GREAT BRITAIN</a>              <a href='#CHAPTER_II'>11</a>
+III     <a href='#CHAPTER_III'>FRANCE</a>                     <a href='#CHAPTER_III'>26</a>
+IV      <a href='#CHAPTER_IV'>GERMANY</a>                    <a href='#CHAPTER_IV'>37</a>
+V       <a href='#CHAPTER_V'>HOLLAND-BELGIUM</a>            <a href='#CHAPTER_V'>42</a>
+VI      <a href='#CHAPTER_VI'>AUSTRIA-HUNGARY</a>            <a href='#CHAPTER_VI'>44</a>
+VII     <a href='#CHAPTER_VII'>ITALY</a>                      <a href='#CHAPTER_VII'>50</a>
+VIII    <a href='#CHAPTER_VIII'>SPAIN-PORTUGAL</a>             <a href='#CHAPTER_VIII'>54</a>
+IX      <a href='#CHAPTER_IX'>DENMARK-NORWAY-SWEDEN</a>      <a href='#CHAPTER_IX'>57</a>
+X       <a href='#CHAPTER_X'>RUSSIA</a>                     <a href='#CHAPTER_X'>59</a>
+XI      <a href='#CHAPTER_XI'>JAPAN-CHINA</a>                <a href='#CHAPTER_XI'>63</a>
+XII     <a href='#CHAPTER_XII'>SOUTH AMERICA</a>              <a href='#CHAPTER_XII'>68</a>
+XIII    <a href='#CHAPTER_XIII'>THE UNITED STATES</a>          <a href='#CHAPTER_XIII'>69</a>
+XIV     <a href='#Page_96'>SUMMARY</a>                    <a href='#CHAPTER_XIV'>97</a>
+        <a href='#INDEX'>INDEX</a>                     <a href='#INDEX'>101</a>
+</pre>
+
+
+<hr style='width: 65%;' />
+<a name='PREFACE'></a><h2><a name='Page_6'></a><a name='Page_7'></a>PREFACE</h2>
+<br />
+
+<p>The intent of this little book is to furnish in compact form the history
+of the development of the ship subsidies systems of the maritime nations
+of the world, and an outline of the present laws or regulations of those
+nations. It is a manual of facts and not of opinions. The author's aim
+has been to present impartially the facts as they appear, without color
+or prejudice, with a view to providing a practical manual of information
+and ready reference. He has gathered the material from documentary
+sources as far as practicable, and from recognized authorities, American
+and foreign, on the general history of the rise and progress of the
+mercantile marine of the world as well as on the special topic of ship
+subsidies. These sources and authorities are named in the footnotes, and
+volume and page given so that reference can easily be made to them for
+details impossible to give in the contracted space to which this manual
+is necessarily confined.</p>
+
+<span style='margin-left: 23em;'>E.M.B.</span><br />
+<br />
+<span style='margin-left: 1em;'>BOSTON, MASS.</span><br />
+<span style='margin-left: 1em;'><i>September 1, 1911.</i></span><br />
+
+
+
+<hr style='width: 65%;' />
+<a name='Manual_of_Ship_Subsidies'></a><h2><a name='Page_8'></a><a name='Page_9'></a>Manual of Ship Subsidies</h2>
+
+
+
+<hr style='width: 65%;' />
+<a name='CHAPTER_I'></a><h2>CHAPTER I</h2>
+
+<p style='text-align: center;'>INTRODUCTORY</p>
+<br />
+
+<p>The term <i>subsidy</i>, defined in the dictionaries as a Government grant in
+aid of a commercial enterprise, is given different shadings of meaning
+in different countries. In all, however, except Great Britain, it is
+broadly accepted as equivalent to a bounty, or a premium, open or
+concealed, directly or indirectly paid by Government to individuals or
+companies for the encouragement or fostering of the trade or commerce of
+the nation granting it.</p>
+
+<p>Ship subsidies are in various forms: premiums on construction of
+vessels; navigation bounties; trade bounties; fishing bounties; postal
+subsidies for the carriage of ocean mails; naval subventions; Government
+loans on low rates of interest.</p>
+
+<p>In Great Britain they comprise postal subsidies and naval subventions,
+ostensibly payments for oversea and colonial mail service exclusively,
+or compensation for such construction of merchant ships under the
+Admiralty regulations as will make them at once available for service as
+armed cruisers and transports. They are assumed to be not bounties in
+excess of the actual value of the service performed, with the real
+though concealed object of fostering the development of British overseas
+navigation. Still, notwithstanding this assumption, such has been their
+practical effect.</p>
+
+<p>Their original objects when first applied to steamship service, as
+defined by a Parliamentary committee in 1853, were&mdash;&quot;to afford us rapid,
+frequent, and punctual communications with distant ports which feed the
+main arteries of British commerce, and with the most important of our
+foreign possessions; to foster maritime enterprise; and to encourage the
+production of a superior class of vessels, <a name='Page_10'></a>which would promote the
+convenience and wealth of the country in time of peace, and assist in
+defending its shores against hostile aggression.&quot; To foster British
+commerce they have undeniably been employed to meet and check foreign
+competition on the seas, as the record shows.</p>
+
+<p>In the United States they have taken the form of postal subsidies openly
+granted for the two-fold purpose of the transportation of the ocean
+mails in American-built and American-owned ships, and the encouragement
+of American shipbuilding and ship-using.</p>
+
+
+
+<hr style='width: 65%;' />
+<a name='CHAPTER_II'></a><h2><a name='Page_11'></a>CHAPTER II</h2>
+
+<p style='text-align: center;'>GREAT BRITAIN</p>
+<br />
+
+<p>England has never granted general ship-construction or navigation
+bounties except in the reigns of Elizabeth and James I. Under Elizabeth
+Parliament offered a bounty of five shillings per ton to every ship
+above one hundred tons burden; and under James I that law was revived,
+with the bounty applying only to vessels of two hundred tons or over.<a name='FNanchor_A_1'></a><a href='#Footnote_A_1'><sup>[A]</sup></a></p>
+
+<p>A policy of Government favoritism to shipping, however, began far back
+in the dim ninth century with Alfred the Great. Under the inspiration of
+this Saxon of many virtues, his people increased the number of English
+merchant vessels and laid the foundation for the creation and
+maintenance of a royal navy.<a name='FNanchor_B_2'></a><a href='#Footnote_B_2'><sup>[B]</sup></a> The Saxon Athelstan, Alfred's grandson,
+whose attention to commerce was also marked, first made it a way to
+honor, one of his laws enacting that a merchant or mariner successfully
+accomplishing three voyages on the high seas with a ship and a cargo of
+his own should be advanced to the dignity of a thane (baron).<a name='FNanchor_C_3'></a><a href='#Footnote_C_3'><sup>[C]</sup></a></p>
+
+<p>The first navigation law was enacted in the year 1381, fifth of Richard
+II. This act, introduced &quot;to awaken industry and increase the wealth of
+the inhabitants and extend their influence,&quot;<a name='FNanchor_D_4'></a><a href='#Footnote_D_4'><sup>[D]</sup></a> ordained that &quot;none of
+the King's liege people should from henceforth ship any merchandise in
+going out or coming within the realm of England but only in the ships of
+the King's liegeance, on penalty of forfeiture of vessel and cargo.&quot;<a name='FNanchor_E_5'></a><a href='#Footnote_E_5'><sup>[E]</sup></a></p>
+
+<p>This act of Richard II was the forerunner of the code of Cromwell, which
+came to be called the &quot;Great Maritime <a name='Page_12'></a>Charter of England,&quot; and the
+fundamental principles of which held up to the second quarter of the
+nineteenth century.</p>
+
+<p>Under Charles I was enacted (1646) the first restrictive act with
+relation to the commerce of the colonies, which ordained &quot;That none in
+any of the ports of the plantations of Virginia, Bermuda, Barbados, and
+other places of America, shall suffer any ship or vessel to lade any
+goods of the growth of the plantations and carry them to foreign ports
+except in English bottoms,&quot; under forfeiture of certain exemptions from
+customs.<a name='FNanchor_F_6'></a><a href='#Footnote_F_6'><sup>[F]</sup></a> It was followed up four years later (1650) under the
+Commonwealth, by an act prohibiting &quot;all foreign vessels whatever from
+lading with the plantations of America without having obtained a
+license.&quot;<a name='FNanchor_G_7'></a><a href='#Footnote_G_7'><sup>[G]</sup></a></p>
+
+<p>Cromwell's code, of which the act of 1381 was the germ, was established
+the next year, 1651. Its primary object was to check the maritime
+supremacy of Holland, then attaining dominance of the sea; and to strike
+a decisive blow at her naval power. The ultimate aim was to secure to
+England the whole carrying trade of the world, Europe only excepted.<a name='FNanchor_H_8'></a><a href='#Footnote_H_8'><sup>[H]</sup></a>
+These were its chief provisions: that no goods or commodities whatever
+of the growth, production, or manufacture of Asia, Africa, or America
+should be imported either into England or Ireland, or any of the
+plantations, except in English-built ships, owned by English subjects,
+navigated by English masters, and of which three-fourths of the crew
+were Englishmen; or in such ships as were the real property of the
+people of the country or place in which the goods were produced, or from
+which they could only be, or most usually were, exported.<a name='FNanchor_I_9'></a><a href='#Footnote_I_9'><sup>[I]</sup></a> This last
+clause was the blow direct to Holland, for the Dutch had little native
+products to export, and their ships were mainly employed in carrying the
+produce of other countries to all foreign markets. It was answered with
+war, the fierce naval war of 1652-1654, in which was exhibited that
+famous <a name='Page_13'></a>spectacle of the at first victorious Dutch admiral, Van Tromp,
+sweeping the English Channel with a broom at his masthead.</p>
+
+<p>With the final defeat of the Dutch after hard fighting on both sides,
+their virtual submission to the English Navigation Act, and their
+admission of the English &quot;sovereignty of the seas,&quot;<a name='FNanchor_J_10'></a><a href='#Footnote_J_10'><sup>[J]</sup></a> by their consent
+to &quot;strike their flag to the shipping of the Commonwealth,&quot; England, in
+her turn, became the chief sea power of the world.<a name='FNanchor_K_11'></a><a href='#Footnote_K_11'><sup>[K]</sup></a> During the ten
+years of peace that followed, however, the Dutch despite the English
+Navigation Act, succeeded in increasing their shipping, and regained
+much of the carrying trade if not their lost leadership.<a name='FNanchor_L_12'></a><a href='#Footnote_L_12'><sup>[L]</sup></a></p>
+
+<p>Cromwell's act was confirmed by Charles II in 1660, and made the basis
+of the code which then her statesmen exalted as &quot;The Great Maritime
+Charter of England.&quot;</p>
+
+<p>Early in Charles II's reign also (in 1662) indirect bounties were
+offered for the encouragement of the building of larger and more
+efficient ships for service in time of war. These were grants of
+one-tenth of the customs dues on the cargo, for two years, to every
+vessel having two and one-half or three decks, and carrying thirty
+guns.<a href='#Footnote_M_13'><sup>[M]</sup></a> Thirty years later (1694), in William and Mary's reign, the
+time was extended to three years. Under William and Mary the granting of
+bounties on naval stores was begun, and this system was continued till
+George III's time.<a href='#Footnote_M_13'><sup>[M]</sup></a> With William and Mary's reign also began the
+giving of indirect bounties to fishermen for the catching and curing of
+fish. After the middle of the eighteenth century vessels engaged in the
+fisheries were regularly subsidized, with the object of training sailors
+for the merchant marine and the royal navy.<a name='FNanchor_M_13'></a><a href='#Footnote_M_13'><sup>[M]</sup></a></p>
+
+<p>While the fundamental rules of the &quot;Maritime Charter&quot; of 1660 remained
+practically unimpaired, although in the succeeding years hundreds of
+regulating statutes were <a name='Page_14'></a>passed, breaks were made in the restrictive
+barriers of the code during the first third of the nineteenth century by
+the adoption of the principle of maritime reciprocity.<a name='FNanchor_N_14'></a><a href='#Footnote_N_14'><sup>[N]</sup></a> In 1815 (July
+3) a convention establishing a &quot;reciprocal liberty of commerce,&quot; between
+the &quot;territories of Great Britain in Europe and those of the United
+States,&quot; was signed in London.<a name='FNanchor_O_15'></a><a href='#Footnote_O_15'><sup>[O]</sup></a> In 1824-1826 reciprocity treaties were
+entered into with various continental powers. In 1827 (August 6) the
+treaty of 1815 with the United States was renewed. In 1830 a treaty for
+regulating the commercial intercourse between the British colonial
+possessions and the United States was executed.<a name='FNanchor_P_16'></a><a href='#Footnote_P_16'><sup>[P]</sup></a> Under these
+conventions, repeatedly interrupted by British Orders in Council and by
+Presidents' proclamations,<a name='FNanchor_Q_17'></a><a href='#Footnote_Q_17'><sup>[Q]</sup></a> the trading intercourse between both
+countries was regulated till the abrogation of the code of 1660.</p>
+
+<p>In 1844 an indirect move against the code was made, with the appointment
+of a committee of the House of Commons to inquire into the working of
+the reciprocal treaties and the condition of the mercantile marine of
+the country.<a name='FNanchor_R_18'></a><a href='#Footnote_R_18'><sup>[R]</sup></a></p>
+
+<p>At this period the competition of the United States in the overseas
+carrying trade of the world was hard pressing England. The Americans
+were building the best wooden ships, superior in model and
+seaworthiness, the fastest sailers. They were leading in shipbuilding.
+Much of the British shipping trade was carried on in American-built
+vessels. The splendid American clipper ships were almost monopolizing
+the carrying trade between Great Britain and the United States. Most of
+the shipping of the world was yet in wooden bottoms. Iron ships were in
+service, but iron-shipbuilding was in its infancy.</p>
+
+<p>The Parliamentary inquiry of 1844 was followed up in 1847 with a move
+openly against the ancient code. Its principles as they then stood,
+essentially as in 1660, despite the multitude of regulating statutes,
+are thus enumerated:</p>
+<a name='Page_15'></a>
+<div class='blkquot'><p>1. Certain named articles of European produce could only be
+     imported into the United Kingdom for consumption in British
+     ships, or in ships of the country of which the goods were the
+     produce, or of the country from which they were usually imported.</p>
+
+<p>     2. No produce of Asia, Africa, or America could be imported for
+     consumption into the United Kingdom from Europe in any ships; and
+     such produce could only be imported from any other place in
+     British ships, or in ships of the country of which the goods were
+     the produce and from which they were usually imported.</p>
+
+<p>     3. No goods could be carried coastwise from one part of the
+     United Kingdom to another in any but British ships.</p>
+
+<p>     4. No goods could be exported from the United Kingdom to any of
+     the British possessions in Asia, Africa, or America (with some
+     exceptions with regard to India) in any but British ships.</p>
+
+<p>     5. No goods could be carried from any one British possession in
+     Asia, Africa, or America, to another, nor from one part of such
+     possession to another part of the same, in any but British ships.</p>
+
+<p>     6. No goods could be imported into any British possession in
+     Asia, Africa, or America in any but British ships, or in ships of
+     the country of which the goods were the produce; provided, also,
+     that such ships brought the goods from that country.</p>
+
+<p>     7. No foreign ships were allowed to trade with any of the British
+     possessions unless they had been especially authorized to do so
+     by an Order in Council.</p>
+
+<p>     8. Powers were given to the Queen in Council which enabled her to
+     impose differential duties on the ships of any foreign country
+     which did the same with reference to British ships; and also to
+     place restrictions on importations from any foreign countries
+     which placed restrictions on British importations with such
+     countries. </p></div>
+
+<p>Finally, in 1849, with the adoption of the commercial policy founded on
+freedom of trade, came the repeal of the restrictive code, excepting
+only the rule as to the British coasting trade; and in 1854 the
+restrictions on that trade were removed, throwing it also open to the
+participation of all nations.</p>
+
+<p>Meanwhile the British ocean-mail subsidy system for steamship service,
+instituted with the satisfactory application of steam to ocean
+navigation, in the late eighteen-thirties, had become established: the
+first contract for open ocean service, made in 1837, being for the
+carriage of the Peninsular mails to Spain and Portugal. Although
+successful ventures in transatlantic steam navigation had begun nearly a
+score of years earlier, the practicability of the employment of steam in
+this service was not fully tested to the satisfaction of the British
+Admiralty till 1838.</p>
+
+<p><a name='Page_16'></a>In this, as in so many other innovations, Americans led the way. The
+first steamer to cross the Atlantic was an American-built and
+American-manned craft. This pioneer was the <i>Savannah</i>, built in New
+York and bought for service between Savannah and Liverpool. She was a
+full-rigged sailing-vessel, of 300 tons, with auxiliary steam power
+furnished by an engine built in New Jersey. Her paddles were removable,
+so fashioned that they could be folded fan-like when the ship was under
+sail only.<a name='FNanchor_S_19'></a><a href='#Footnote_S_19'><sup>[S]</sup></a> She made the initial voyage, from Savannah to Liverpool,
+in the Summer of 1819, and accomplished it in twenty-seven days,<a name='FNanchor_T_20'></a><a href='#Footnote_T_20'><sup>[T]</sup></a>
+eighty hours of the time under steam. Afterwards she made a trip to St.
+Petersburg, partly steaming and partly sailing, with calls at ports
+along the way. Her gallant performance attracted wide attention, but
+upon her return to America she finally brought up at New York, where her
+machinery was removed and sold.</p>
+
+<p>An English-built full-fledged steamer made the next venture, but not
+until a decade after the <i>Savannah's</i> feat. This was the <i>Cura&ccedil;oa</i>, 350
+tons, and one hundred horsepower, built for Hollanders, and sent out
+from England in 1829. The third was by a Canada-built ship&mdash;the <i>Royal
+William</i>, 500 or more tons, and eighty horsepower, with English-built
+engines, launched at Three Rivers. She crossed from Quebec to Gravesend
+in 1833. The next were the convincing tests that settled for the
+Admiralty the question of transatlantic mail service by steamship
+instead of sailing packet. These were the voyages out and back of the
+<i>Sirius</i> and the <i>Great Western</i> in 1838.</p>
+
+<p>The <i>Sirius</i> had been in service between London and Cork. The <i>Great
+Western</i> was new, and was the first steamship to be specially
+constructed for the trade between England and the United States. Both
+were much larger than their three predecessors in steam transatlantic
+ventures, and better equipped. The <i>Sirius</i> started out with ninety-four
+passengers, on the fourth of April, 1838, and reached New York on the
+twenty-first, a passage of seventeen days. <a name='Page_17'></a>The <i>Great Western</i>, also
+with a full complement of passengers, left three days after the
+<i>Sirius</i>, sailing from Bristol, and swung into New York harbor on the
+twenty-third, making her passage in two days' less time than her rival.
+Both were hailed in New York with &quot;immense acclamation.&quot; They sailed on
+their homeward voyage in May, six days apart, and made the return
+passage respectively in sixteen and fourteen days. The <i>Great Western</i>
+on her second homeward voyage beat all records, making the run in twelve
+days and fourteen hours, and &quot;bringing with her the advices of the
+fastest American sailing-ships which had started from New York long
+before her.&quot;<a name='FNanchor_U_21'></a><a href='#Footnote_U_21'><sup>[U]</sup></a> This clinched the matter. The Admiralty now invited
+tenders for the transatlantic mail service, by steam, between Liverpool,
+Halifax, and New York.</p>
+
+<p>The first call for tenders was made in October, 1838. The St. George's
+Packet Company, owners of the <i>Sirius</i>, and the Great Western Steamship
+Company, owners of the <i>Great Western</i>, put in bids, the former offering
+a monthly service between Cork, Halifax, and New York for a yearly
+subsidy of sixty-five thousand pounds; the latter, a monthly service
+between Bristol, Halifax, and New York for forty-five thousand pounds a
+year.</p>
+
+<p>Neither offer was accepted for the reason, as was stated, that a
+semimonthly service was desired.<a href='#Footnote_V_22'><sup>[V]</sup></a> Instead, private arrangements were
+made with Samuel Cunard and associates for a carriage between Liverpool,
+Halifax, Quebec, and Boston, twice a month, for a term of seven years,
+the subsidy to be sixty thousand pounds annually, less four thousand
+pounds for making only one voyage a month in the winter season.<a name='FNanchor_W_23'></a><a href='#Footnote_W_23'><sup>[W]</sup></a> The
+contract required Mr. Cunard and his associates to furnish five ocean
+steamships and two river steamers, the latter on the St. Lawrence.<a name='FNanchor_V_22'></a><a href='#Footnote_V_22'><sup>[V]</sup></a>
+There were also definite restrictions as to turning their steamers over
+to the Government for use in time of war. All were to be inspected by
+Admiralty officers, and were to carry officers <a name='Page_18'></a>of the navy to care for
+the mails.<a name='FNanchor_X_24'></a><a href='#Footnote_X_24'><sup>[X]</sup></a> The service was started with the <i>Britannia</i>, the first of
+the four to be finished, sailing from Liverpool for Boston on July 4,
+1840. Thus was begun the career of the celebrated Cunard Line. In 1841
+the subsidy was increased to eighty thousand pounds, and the number of
+steamers to five; and in 1846, a further increase brought the subsidy to
+eighty-five thousand pounds.<a name='FNanchor_Y_25'></a><a href='#Footnote_Y_25'><sup>[Y]</sup></a></p>
+
+<p>The Admiralty's favoritism toward the Cunard associates aroused a
+protest from the unsuccessful bidders for the subsidy, and at length the
+Great Western Company, whose bid had been the lowest, caused a
+Parliamentary inquiry to be made into the transaction. They complained
+that a monopoly had been granted &quot;to their injury and to that of other
+owners of steamships engaged in the trade, and who were desirous of
+entering it&quot;; and they asked the inquiry on the broad grounds &quot;that the
+public were taxed for a service from which one company alone derived the
+advantage, and which could be equally well done and at less expense if
+mails were sent out by all steamers engaged in the trade, each receiving
+a certain amount percentage on the letters they carried.&quot;<a name='FNanchor_Z_26'></a><a href='#Footnote_Z_26'><sup>[Z]</sup></a> Although
+the fact was brought out in the testimony that the Great Western Company
+had offered to perform the service on practically the same basis as the
+Cunard associates, and that afterwards the Great Western had proposed to
+do it at half the subsidy to the Cunarders, the investigating committee
+sustained the Admiralty's action.<a name='FNanchor_AA_27'></a><a href='#Footnote_AA_27'><sup>[AA]</sup></a></p>
+
+<p>The Great Western Company overcame the advantage of the Cunarders in the
+latter's high mail subsidy by increased enterprise and superior
+management; and prospered. In 1843 they launched the <i>Great Britain</i>,
+the largest and finest steamship up to that period built for overseas
+service.<a name='FNanchor_AB_28'></a><a href='#Footnote_AB_28'><sup>[AB]</sup></a> She was, moreover, distinguished as the first liner to be
+built of iron instead of wood, and to be propelled by the screw instead
+of the paddle-wheel. In the latter <a name='Page_19'></a>innovation, however, she was not the
+pioneer. Again the Americans were first in the application of the
+auxiliary screw to ocean navigation,<a name='FNanchor_AC_29'></a><a href='#Footnote_AC_29'><sup>[AC]</sup></a> as they had been first in
+despatching a steamer across the Atlantic.</p>
+
+<p>The initial transatlantic subsidy to the Cunard Company was followed up
+in 1840 and 1841 with contracts for steam mail-carriage to the West
+Indies and South American ports.<a name='FNanchor_AD_30'></a><a href='#Footnote_AD_30'><sup>[AD]</sup></a> The first (1840) went to the Royal
+Mail Steam Packet Company, for the West Indian service, the mail subsidy
+fixed at two hundred and forty thousand pounds a year;<a name='FNanchor_AE_31'></a><a href='#Footnote_AE_31'><sup>[AE]</sup></a> the second
+(1841), to the Pacific Steam Navigation Company. The latter enterprise
+was promoted by an American,<a name='FNanchor_AF_32'></a><a href='#Footnote_AF_32'><sup>[AF]</sup></a> after he had failed to obtain support
+in his own country<a name='FNanchor_AG_33'></a><a href='#Footnote_AG_33'><sup>[AG]</sup></a> for a project to establish an American steamship
+line to ports along the west coast of South America, a field in which
+American sailing ships had long been pre&euml;minent.<a name='FNanchor_AH_34'></a><a href='#Footnote_AH_34'><sup>[AH]</sup></a></p>
+
+<p>Up to 1847 the British lines monopolized the transatlantic service. Then
+the situation became enlivened by the advent of competing American
+steamships subsidized by the United States Government, with high-paying
+mail contracts. The first of these was the New York, Havre, and Bremen
+line starting in 1847; the next, the celebrated Collins Line between New
+York and Liverpool, underway in 1850. The competing vessels were
+American-built, wooden side-wheelers; those of the Collins Line superior
+in equipment and in passenger accommodations, and faster sailers, than
+the British craft.<a name='FNanchor_AI_35'></a><a href='#Footnote_AI_35'><sup>[AI]</sup></a> To meet this competition the Cunard Company
+increased their fleet while the Admiralty increased the subsidy. Four
+new steamers were first added, in 1848, to run directly between
+Liverpool and New York, and the postal subsidy was raised to one hundred
+<a name='Page_20'></a>and forty-five thousand pounds a year for forty-four voyages&mdash;three
+thousand nine hundred and twenty-five pounds a voyage.<a name='FNanchor_AJ_36'></a><a href='#Footnote_AJ_36'><sup>[AJ]</sup></a> The
+competition began sharply with the regular running of the Collins
+liners, in 1850. Meanwhile during this year and the next additional
+contracts were given the Cunard Company for carrying the mails between
+Halifax, New York, and Bermuda, on the North American side, in small
+steamers, fitted with space for mounting an 18-pounder pivot-gun,
+subsidy ten thousand six hundred pounds a year; and for a monthly mail
+conveyance between Bermuda and St. Thomas, subsidy four thousand one
+hundred pounds a year.[AK] These services united the West Indies with
+the United States and Canada.<a name='FNanchor_AK_37'></a><a href='#Footnote_AK_37'><sup>[AK]</sup></a></p>
+
+<p>In 1851 John Inman entered the trade with his &quot;Inman Line&quot; of
+transatlantic screw steamers, which were to carry general cargo and
+emigrant passengers, then a steadily increasing business, and to be
+independent in all respects of either the Admiralty or the
+Post-Office.<a name='FNanchor_AL_38'></a><a href='#Footnote_AL_38'><sup>[AL]</sup></a> The unsubsidized line prospered. The next year (1852)
+the Cunard Company increased their liners' horsepower, and the Admiralty
+again increased their subsidy. The contract, now made to run for ten
+years, provided a subsidy of one hundred and seventy-three thousand
+three hundred and forty pounds per fifty-two round trips a year. The
+Americans were pressing them closer. Now freight rates were cut, and the
+British premier is quoted as advising the Cunard Company to run without
+freight if necessary to &quot;beat off the American line.&quot;<a name='FNanchor_AM_39'></a><a href='#Footnote_AM_39'><sup>[AM]</sup></a> The increasing
+subsidies occasioned a Parliamentary investigation. The committee,
+evidently impressed by the gravity of the American competition, reported
+that &quot;the cost of the North American service was not excessive,&quot; but
+they advised that all contracts thereafter &quot;be let at public
+bidding.&quot;<a name='FNanchor_AN_40'></a><a href='#Footnote_AN_40'><sup>[AN]</sup></a> This recommendation was not heeded. In 1857, upon the plea
+that the Americans were about to build larger and more powerful liners,
+the Cunard Company asked a five years' extension of the contract of
+<a name='Page_21'></a>1852. The extension was promptly granted. At the same time they were
+awarded an additional subsidy of three thousand pounds for a monthly
+mail service between New York and Nassau in the Bahamas.<a name='FNanchor_AO_41'></a><a href='#Footnote_AO_41'><sup>[AO]</sup></a> The next
+year (1858) after suffering crushing disasters in the loss of two of
+their steamers, and the withdrawal of their subsidy, the Collins Company
+failed, and their line was abandoned.<a name='FNanchor_AP_42'></a><a href='#Footnote_AP_42'><sup>[AP]</sup></a> So this competition ended.</p>
+
+<p>Meanwhile complaints of the Admiralty's partiality in the allotment of
+the contracts had been renewed more vigorously, with wider criticism of
+grants for mail carriage largely in excess of the postage received; and
+in 1859-60 another Parliamentary investigation was made. The ultimate
+result of this inquiry was a radical change in the system. The
+management of the ocean mail-service was taken from the Admiralty and
+placed wholly in the hands of the Post-Office Department; and at the
+expiration of the Cunard Company's extended contract, the service was
+thrown open to public competition, as the Parliamentary committee of
+1846 had advised.</p>
+
+<p>Bids were now received from the Cunard, the Inman, the North German
+Lloyd, and other lines. The Inman Company had previously offered to
+perform the service, and had done so for sea-postage only.<a name='FNanchor_AQ_43'></a><a href='#Footnote_AQ_43'><sup>[AQ]</sup></a> Contracts
+were finally concluded with the three named. The contract with the Inman
+Line was for a fortnightly Halifax service, for seven hundred and fifty
+pounds the round trip, nineteen thousand five hundred pounds a year, and
+a weekly New York service for sea-postage. That with the Cunard Line was
+for a weekly service to New York at a fixed subsidy of eighty thousand
+pounds. That with the North German Lloyd was for a weekly service, at
+the sea-postage. These contracts were to run for a year only. The
+Cunard's subsidy, although considerably less than half the amount that
+the company had received the previous ten years, showed a loss to the
+Government, at sea-postage rates, of forty-four thousand one hundred and
+ninety-six pounds, <a name='Page_22'></a>since the amount actually earned at sea-postage
+rates was twenty-eight thousand six hundred and eighty-six pounds.<a href='#Footnote_AR_44'><sup>[AR]</sup></a></p>
+
+<p>When advertisements for tenders were next issued, it was found that the
+Cunard and Inman companies had formed a &quot;community of interests,&quot; with
+an agreement not to underbid each other. They asked a ten years'
+contract on the basis of fifty thousand pounds fixed subsidy for a
+weekly service. Instead, they were awarded seven years' contracts: the
+Cunard for a semi-weekly service, seventy thousand pounds subsidy; the
+Inman, for a weekly service, thirty-five thousand pounds subsidy.<a name='FNanchor_AR_44'></a><a href='#Footnote_AR_44'><sup>[AR]</sup></a> At
+the same time contracts were made with the North German Lloyd and the
+Hamburg-American lines for a weekly service for the sea-postage.</p>
+
+<p>The Cunard and Inman grants were sharply criticised, and a Parliamentary
+committee was appointed to investigate them. The committee's report
+sustained the critics. It observed that &quot;the payments to be made when
+compared with those made by the American Post Office for the homeward
+mails are widely different, inasmuch as the American Post Office has
+hitherto paid only for actual services rendered at about half the rate
+of the British Post Office when paying by the quantity of letters
+carried.&quot; The committee recommended that these contracts be disapproved,
+and that the system of fixed subsidies be abolished. &quot;Under all
+circumstances,&quot; they concluded, &quot;we are of the opinion that, considering
+the already large and continually increasing means of communication with
+the United States, there is no longer any necessity for fixed subsidies
+for a term of years in the case of this service.&quot;<a name='FNanchor_AS_45'></a><a href='#Footnote_AS_45'><sup>[AS]</sup></a> This
+recommendation, however, was not accepted, and the contracts were duly
+ratified.</p>
+
+<p>The report of this Parliamentary committee is significant in the
+evidence it indirectly affords, confirming the declaration of
+1853,<a name='FNanchor_AT_46'></a><a href='#Footnote_AT_46'><sup>[AT]</sup></a>&mdash;that the postal subsidies were not as assumed, payments
+solely for services rendered, but in fact were concealed bounties.</p>
+
+<p><a name='Page_23'></a>In 1871-72, when a renewed effort was made to establish an American
+line of American-built ships,<a name='FNanchor_AU_47'></a><a href='#Footnote_AU_47'><sup>[AU]</sup></a> the British subsidies were again
+increased. Then, also, was instituted by the Admiralty the naval
+subvention system&mdash;the payment of annual retainers to certain classes of
+merchant steamers, the largest and swiftest, in readiness for quick
+conversion into auxiliary naval ships in case of war, and to preclude
+their becoming available for the service of any power inimical to
+British interests.</p>
+
+<p>At the expiration of the Cunard and Inman seven years' contracts the
+postmaster-general applied the principle of payment according to weight
+throughout for the carriage of the North American mails. But preference
+was given to British ships, these receiving higher rates per pound than
+the foreign. In 1887 an arrangement was entered into by which the Cunard
+and Oceanic lines were to carry all mails except specially directed
+letters, and the pay was reduced.<a name='FNanchor_AV_48'></a><a href='#Footnote_AV_48'><sup>[AV]</sup></a> This method of payment continued
+till 1903.</p>
+
+<p>Then another sharp change was made in the subsidy system to meet
+another, and most threatening American move. In 1902 was formed by
+certain American steamship men, through the assistance of J. Pierpont
+Morgan, the &quot;International Mercantile Marine Company,&quot; in popular
+parlance, the &quot;Morgan Steamship Merger,&quot; a &quot;combine&quot; of a large
+proportion of the transatlantic steam lines.<a name='FNanchor_AW_49'></a><a href='#Footnote_AW_49'><sup>[AW]</sup></a> Upon this, in response
+to a popular clamor, subsidy, and in a large dose, was openly granted to
+sustain British supremacy in overseas steam-shipping. To keep the Cunard
+Line out of the American merger, and hold it absolutely under British
+control and British capitalization, and, furthermore, to aid the company
+immediately to build ships capable of equalling if not surpassing the
+highest type of ocean liners that had to that time been produced (the
+highest type then being German-built steamers operating under the German
+flag), the Cunard Company were resubsidized with a special fixed subsidy
+of three-quarters of a million <a name='Page_24'></a>dollars a year, instead of the Admiralty
+subvention of about seventy-five thousand dollars, and in addition to
+their regular mail pay, the subsidy to run for a period of twenty years
+after the completion of the second of two high-grade, high-speed ocean
+&quot;greyhounds&quot; called for for the Atlantic trade. The Government were to
+lend the money for the construction of the two new ships at the rate of
+2-3/4 per cent per annum, the company to repay the loan by annual
+payments extending over twenty years. The company on their part pledged
+themselves, until the expiry of the agreement, to remain a purely
+British undertaking, the management, the stock of the corporation, and
+their ships, to be in the hands of or held by British subjects only.
+They were to hold the whole of their fleet, including the two new
+vessels, and all others to be built, at the disposal of the Government,
+the latter being at liberty to charter or purchase any or all at agreed
+rates. They were not to raise freights unduly nor to give any
+preferential rates to foreigners.<a name='FNanchor_AX_50'></a><a href='#Footnote_AX_50'><sup>[AX]</sup></a> The subsidy is equivalent to about
+twenty thousand dollars for an outward voyage of three thousand miles.</p>
+
+<hr style='width: 45%;' />
+
+<p>Of the British colonies, Canada grants mail and steamship subsidies, and
+fisheries bounties. In 1909-10 the Dominion's expenditures in mail and
+steamship subsidies amounted to a total equivalent to $1,736,372. The
+amount appropriated for 1910-11 increased to $2,054,200; while the
+estimates for 1911-12 reached a total of $2,006,206. In these estimates
+the larger items were: for service between Canada and Great Britain;
+Australia by the Pacific; Canadian Atlantic ports and Australia and New
+Zealand; South Africa; Mexico by the Atlantic, and by the Pacific; West
+Indies and South America; China and Japan; Canada <a name='Page_25'></a>and France.<a name='FNanchor_AY_51'></a><a href='#Footnote_AY_51'><sup>[AY]</sup></a> The
+home Government pays the same amount as Canada toward maintaining the
+China and Japan, and British West Indies services.<a name='FNanchor_AZ_52'></a><a href='#Footnote_AZ_52'><sup>[AZ]</sup></a> The fisheries
+bounties amounted to one hundred and sixty thousand dollars in 1909.<a name='FNanchor_BA_53'></a><a href='#Footnote_BA_53'><sup>[BA]</sup></a></p>
+
+<hr style='width: 45%;' />
+
+<p>The grand total of subsidies and subventions paid by Great Britain and
+all her colonies in 1911 approximate ten million dollars annually. The
+subsidies and mail pay of the Imperial Government amounted, in round
+numbers, to four million dollars, of which, in 1910, the Cunard Company
+received seven hundred and twenty-nine thousand dollars.<a name='FNanchor_BB_54'></a><a href='#Footnote_BB_54'><sup>[BB]</sup></a> Besides the
+Admiralty subventions, retainer bounties are paid to merchant seamen and
+fishermen of the Royal Naval Reserve.</p>
+
+<p>Since the establishment of steam in regular ocean navigation, and the
+substitution of iron for wooden ships, England has maintained her
+leadership among the maritime nations. The total tonnage of the United
+Kingdom and her colonies, steam and sailing ships, in 1910-11, stood at
+19,012,294 tons.<a name='FNanchor_BC_55'></a><a href='#Footnote_BC_55'><sup>[BC]</sup></a> nearly four fold that of any other nation.</p>
+
+<p>FOOTNOTES:</p>
+
+<a name='Footnote_A_1'></a><a href='#FNanchor_A_1'>[A]</a><div class='note'><p> Royal Meeker, &quot;History of Ship Subsidies.&quot;</p></div>
+
+<a name='Footnote_B_2'></a><a href='#FNanchor_B_2'>[B]</a><div class='note'><p> John E. Green, &quot;Short History of the English People.&quot;</p></div>
+
+<a name='Footnote_C_3'></a><a href='#FNanchor_C_3'>[C]</a><div class='note'><p> W.H. Lindsay, &quot;History of Merchant Shipping.&quot;</p></div>
+
+<a name='Footnote_D_4'></a><a href='#FNanchor_D_4'>[D]</a><div class='note'><p> Lindsay.</p></div>
+
+<a name='Footnote_E_5'></a><a href='#FNanchor_E_5'>[E]</a><div class='note'><p> David A. Wells, &quot;Our Merchant Marine,&quot; p. 96.</p></div>
+
+<a name='Footnote_F_6'></a><a href='#FNanchor_F_6'>[F]</a><div class='note'><p> John Lewis Ricardo, &quot;The Anatomy of the Navigation Laws,&quot;
+p. 111.</p></div>
+
+<a name='Footnote_G_7'></a><a href='#FNanchor_G_7'>[G]</a><div class='note'><p> Lindsay, vol. III.</p></div>
+
+<a name='Footnote_H_8'></a><a href='#FNanchor_H_8'>[H]</a><div class='note'><p> Lindsay, &quot;Our Navigation Laws&quot;; also his History.</p></div>
+
+<a name='Footnote_I_9'></a><a href='#FNanchor_I_9'>[I]</a><div class='note'><p> Ricardo; also Lindsay in other words.</p></div>
+
+<a name='Footnote_J_10'></a><a href='#FNanchor_J_10'>[J]</a><div class='note'><p> Meaning the waters between Great Britain and the
+continent.</p></div>
+
+<a name='Footnote_K_11'></a><a href='#FNanchor_K_11'>[K]</a><div class='note'><p> Green, p. 593.</p></div>
+
+<a name='Footnote_L_12'></a><a href='#FNanchor_L_12'>[L]</a><div class='note'><p> Ricardo, p. 26.</p></div>
+
+<a name='Footnote_M_13'></a><a href='#FNanchor_M_13'>[M]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_N_14'></a><a href='#FNanchor_N_14'>[N]</a><div class='note'><p> W.W. Bates, &quot;American Marine,&quot; pp. 57-59.</p></div>
+
+<a name='Footnote_O_15'></a><a href='#FNanchor_O_15'>[O]</a><div class='note'><p> John Macgregor, &quot;Commercial Tariffs.&quot;</p></div>
+
+<a name='Footnote_P_16'></a><a href='#FNanchor_P_16'>[P]</a><div class='note'><p> Lindsay, vol. III, p. 65.</p></div>
+
+<a name='Footnote_Q_17'></a><a href='#FNanchor_Q_17'>[Q]</a><div class='note'><p> Macgregor.</p></div>
+
+<a name='Footnote_R_18'></a><a href='#FNanchor_R_18'>[R]</a><div class='note'><p> Lindsay, vol. III, p. 69; also pp. 53-54 and 107.</p></div>
+
+<a name='Footnote_S_19'></a><a href='#FNanchor_S_19'>[S]</a><div class='note'><p> Rear-Admiral George H. Preble, &quot;Chronological History of
+Steam Navigation.&quot;</p></div>
+
+<a name='Footnote_T_20'></a><a href='#FNanchor_T_20'>[T]</a><div class='note'><p> Preble. Lindsay says thirty-seven.</p></div>
+
+<a name='Footnote_U_21'></a><a href='#FNanchor_U_21'>[U]</a><div class='note'><p> Preble, p. 137; also Bates, p. 185.</p></div>
+
+<a name='Footnote_V_22'></a><a href='#FNanchor_V_22'>[V]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_W_23'></a><a href='#FNanchor_W_23'>[W]</a><div class='note'><p> Parliamentary papers 1839, vol. XLVI, no. 566, as to the
+private contract.</p></div>
+
+<a name='Footnote_X_24'></a><a href='#FNanchor_X_24'>[X]</a><div class='note'><p> Lindsay, vol. IV.</p></div>
+
+<a name='Footnote_Y_25'></a><a href='#FNanchor_Y_25'>[Y]</a><div class='note'><p> Meeker; also Parl. papers 1849, vol. XII, no. 571.</p></div>
+
+<a name='Footnote_Z_26'></a><a href='#FNanchor_Z_26'>[Z]</a><div class='note'><p> Lindsay, vol. X; also Parl. papers, report H. of C., Aug.,
+1840.</p></div>
+
+<a name='Footnote_AA_27'></a><a href='#FNanchor_AA_27'>[AA]</a><div class='note'><p> Report of Select Com. (1846) Parl. papers, vol. XV, no.
+565, p. 3.</p></div>
+
+<a name='Footnote_AB_28'></a><a href='#FNanchor_AB_28'>[AB]</a><div class='note'><p> Lindsay, vol. IV.</p></div>
+
+<a name='Footnote_AC_29'></a><a href='#FNanchor_AC_29'>[AC]</a><div class='note'><p> The <i>Princeton</i>, sloop-of-war fitted with the Ericsson
+screw, launched the same year.</p></div>
+
+<a name='Footnote_AD_30'></a><a href='#FNanchor_AD_30'>[AD]</a><div class='note'><p> Lindsay, vol. IV, p. 198, <i>note</i>.</p></div>
+
+<a name='Footnote_AE_31'></a><a href='#FNanchor_AE_31'>[AE]</a><div class='note'><p> John R. Spears, &quot;The Story of the American Merchant
+Marine,&quot; pp. 254-255.</p></div>
+
+<a name='Footnote_AF_32'></a><a href='#FNanchor_AF_32'>[AF]</a><div class='note'><p> William Wheelwright, of Newburyport, Massachusetts,
+sometime American consul at Guayaquil.</p></div>
+
+<a name='Footnote_AG_33'></a><a href='#FNanchor_AG_33'>[AG]</a><div class='note'><p> Winthrop L. Marvin, &quot;The American Merchant Marine,&quot; p.
+231; also Preble; and Lindsay, vol. IV, pp. 316-330.</p></div>
+
+<a name='Footnote_AH_34'></a><a href='#FNanchor_AH_34'>[AH]</a><div class='note'><p> Marvin, p. 231.</p></div>
+
+<a name='Footnote_AI_35'></a><a href='#FNanchor_AI_35'>[AI]</a><div class='note'><p> See p. 76, <i>post</i>.</p></div>
+
+<a name='Footnote_AJ_36'></a><a href='#FNanchor_AJ_36'>[AJ]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_AK_37'></a><a href='#FNanchor_AK_37'>[AK]</a><div class='note'><p> Lindsay, vol. IV, p. 198, <i>note</i>.</p></div>
+
+<a name='Footnote_AL_38'></a><a href='#FNanchor_AL_38'>[AL]</a><div class='note'><p> Wells, p. 148.</p></div>
+
+<a name='Footnote_AM_39'></a><a href='#FNanchor_AM_39'>[AM]</a><div class='note'><p> Bates, p. 87; also p. 130.</p></div>
+
+<a name='Footnote_AN_40'></a><a href='#FNanchor_AN_40'>[AN]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_AO_41'></a><a href='#FNanchor_AO_41'>[AO]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_AP_42'></a><a href='#FNanchor_AP_42'>[AP]</a><div class='note'><p> See p. 77, <i>post</i>.</p></div>
+
+<a name='Footnote_AQ_43'></a><a href='#FNanchor_AQ_43'>[AQ]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_AR_44'></a><a href='#FNanchor_AR_44'>[AR]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_AS_45'></a><a href='#FNanchor_AS_45'>[AS]</a><div class='note'><p> Parl. papers, 1867-68, 1868-69.</p></div>
+
+<a name='Footnote_AT_46'></a><a href='#FNanchor_AT_46'>[AT]</a><div class='note'><p> See p. 20, <i>ante</i>.</p></div>
+
+<a name='Footnote_AU_47'></a><a href='#FNanchor_AU_47'>[AU]</a><div class='note'><p> The American Steamship Co. of Phila., with 4 iron steamers
+built on the Delaware&mdash;the <i>Pennsylvania</i>, <i>Ohio</i>, <i>Indiana</i>, and
+<i>Illinois</i>.</p></div>
+
+<a name='Footnote_AV_48'></a><a href='#FNanchor_AV_48'>[AV]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_AW_49'></a><a href='#FNanchor_AW_49'>[AW]</a><div class='note'><p> Ultimately embracing the American, Red Star, White Star,
+Atlantic Transport, and Dominion Lines.</p></div>
+
+<a name='Footnote_AX_50'></a><a href='#FNanchor_AX_50'>[AX]</a><div class='note'><p> For details of this contract see report of (U.S.)
+commissioner of navigation for 1903, pp. 48-52, and 224-268. The two
+steamships called for were the <i>Lusitania</i>, 31,550 gross tons, launched
+June 7, 1906; and the <i>Mauretania</i>, 31,937 gross tons, launched Sept.
+19, 1906, both quadruple screw turbines, about 70,000 horsepower; the
+largest, fastest, and completest steamers afloat till the production in
+1911 of the <i>Olympic</i>, 45,324 gross tons, of the International
+Mercantile Marine Co.'s White Star Line.</p></div>
+
+<a name='Footnote_AY_51'></a><a href='#FNanchor_AY_51'>[AY]</a><div class='note'><p> U.S. consul, Charlottetown, P.E.I. in daily Con. Repts.
+(Jan. 20) 1911, no. 16.</p></div>
+
+<a name='Footnote_AZ_52'></a><a href='#FNanchor_AZ_52'>[AZ]</a><div class='note'><p> Consul General Small, Halifax, in Con. Repts. (Dec.) 1905,
+no. 303.</p></div>
+
+<a name='Footnote_BA_53'></a><a href='#FNanchor_BA_53'>[BA]</a><div class='note'><p> The American Year Book, 1911.</p></div>
+
+<a name='Footnote_BB_54'></a><a href='#FNanchor_BB_54'>[BB]</a><div class='note'><p> American Year Book, 1911.</p></div>
+
+<a name='Footnote_BC_55'></a><a href='#FNanchor_BC_55'>[BC]</a><div class='note'><p> Lloyd's Register, 1910-11.</p></div>
+
+
+
+<hr style='width: 65%;' />
+<a name='CHAPTER_III'></a><h2><a name='Page_26'></a>CHAPTER III</h2>
+
+<p style='text-align: center;'>FRANCE</p>
+<br />
+
+<p>France has been rightly termed the bounty-giving nation <i>par
+excellence</i>.<a href='#Footnote_BD_56'><sup>[BD]</sup></a> She first adopted a policy of State protection of
+native shipping in the middle of the sixteenth century with the
+enactment (1560) of an exclusive Navigation Act, forbidding her subjects
+to freight foreign vessels in any port of the realm, and prohibiting
+foreign ships from carrying any kind of merchandise from French
+ports.<a name='FNanchor_BE_57'></a><a href='#Footnote_BE_57'><sup>[BE]</sup></a> This was followed up in the next century with the institution
+of the direct bounty system to foster French-built ships.<a name='FNanchor_BD_56'></a><a href='#Footnote_BD_56'><sup>[BD]</sup></a></p>
+
+<p>In the reign of Louis XIV, Colbert, Louis's celebrated finance minister,
+perfected (about 1661) an elaborate system of navigation laws, evidently
+copied from the rigorous English code. This was directed primarily
+against the commerce of Holland and England, with the ultimate object of
+upbuilding the home merchant marine and the laying of a broad basis for
+a national navy.<a name='FNanchor_BF_58'></a><a href='#Footnote_BF_58'><sup>[BF]</sup></a> These acts included decrees giving French ships the
+monopoly of trade to and from the colonies of France; imposing tonnage
+duties on foreign shipping; awarding direct premiums on French-built
+ships. England retaliated immediately. Holland remonstrated first, then
+made reprisals. For a time under Colbert's energetic administration of
+the finances and the marine, &quot;prosperity grew apace. At the end of
+twelve years everything was flourishing.&quot;<a href='#Footnote_BG_59'><sup>[BG]</sup></a> Then came the six years'
+war (1672-1678) with France and England combined against Holland, and at
+its end the French merchant marine lay sorely crippled.<a name='FNanchor_BG_59'></a><a href='#Footnote_BG_59'><sup>[BG]</sup></a></p>
+
+<p>Still the fundamental principles of the stringent navigation laws long
+remained. A decree in 1681, and subsequent <a name='Page_27'></a>ordinances, defined what
+should constitute a French vessel; and corporal punishment was ordained
+against a captain for a second offence in navigating a vessel of alien
+ownership under the French flag.<a href='#Footnote_BH_60'><sup>[BH]</sup></a> By later decrees, no alien was
+permitted to command a French vessel. An ordinance of 1727 further
+restricted alien command by shutting out even French subjects who had
+married aliens.<a href='#Footnote_BH_60'><sup>[BH]</sup></a> It was required that every French vessel should be
+manned by a crew two-thirds of whom were French subjects.<a href='#Footnote_BH_60'><sup>[BH]</sup></a> The system
+of regulations restricting the trade of the French colonies to French
+ships, and to the home market held till well into the nineteenth
+century.</p>
+
+<p>During the Revolution a decree (May, 1791) prohibited acquisition of all
+vessels of foreign build. In 1793 (Sept.) it was ordained that no
+foreign commodities, productions, or merchandise should be imported into
+France, or into any of her colonies or possessions, except directly in
+French ships, or in ships belonging to the inhabitants of the countries
+in which the articles imported were produced, or from the ordinary ports
+of sale or exportation. All officers and three-fourths of the crew were
+required to be natives of the country of which the foreign vessel bore
+the flag, under penalty of confiscation of vessel and cargo, and a fine
+enforcible under pain of imprisonment. A tonnage tax was levied on
+foreign ships alone.</p>
+
+<p>Despite this elaborate code designed for its benefit the domestic
+mercantile marine almost entirely disappeared during the wars of the
+Republic and the Empire; and after the Restoration its revival was so
+slow that for some time foreign ships were absolutely necessary for the
+supply of the French market.<a name='FNanchor_BH_60'></a><a href='#Footnote_BH_60'><sup>[BH]</sup></a> Still the underlying principles of the
+code were retained by the Restoration Government, modified in a few
+particulars. The modifications included the removal of the prohibition
+on indirect commerce&mdash;- the carrying trade between France and other
+countries:&mdash;yet advantage even in this commerce was held for the French
+flag through &quot;flag surtaxes,&quot; added to the ordinary customs duties
+levied upon the merchandise imported into France in foreign <a name='Page_28'></a>bottoms,
+and by the tonnage charges.<a href='#Footnote_BI_61'><sup>[BI]</sup></a> A law of March, 1822, renewed the
+prohibition against the importation of foreign-built ships.<a name='FNanchor_BI_61'></a><a href='#Footnote_BI_61'><sup>[BI]</sup></a></p>
+
+<p>Early under Napoleon III movements toward the adoption of an economic
+policy similar to that then established in England were begun, and
+shortly a succession of radical changes in the maritime code were
+instituted.<a href='#Footnote_BJ_62'><sup>[BJ]</sup></a> In 1860 a commercial treaty with England was entered
+into. In 1861 freedom of access of foreign shipping to the French West
+Indies was permitted, subject to the payment of special duties varying
+according to the ports whence the goods were brought, or to which they
+were imported. Then at length, in 1866, numerous restrictions of the old
+code were swept away.<a name='FNanchor_BJ_62'></a><a href='#Footnote_BJ_62'><sup>[BJ]</sup></a> This law of 1866 (May) admitted duty-free all
+materials, raw or manufactured, including boilers and parts of engines
+necessary for the construction, rigging, and outfitting of iron or
+wooden ships; abolished a premium, or bounty, granted by a law of 1841
+(May) on all steam engines manufactured in France intended for
+international navigation; admitted to registration foreign-built and
+fully equipped ships upon the payment of two francs a ton; abolished all
+tonnage duties on foreign ships, except such as had been or might be
+levied for the improvement of certain commercial harbors; abolished the
+flag surtaxes; opened colonial navigation to foreign ships. The monopoly
+of the coasting trade alone was retained for French ships.<a href='#Footnote_BK_63'><sup>[BK]</sup></a></p>
+
+<p>Complaints against these new regulations were promptly raised by
+shipbuilders and ship-outfitters,<a name='FNanchor_BK_63'></a><a href='#Footnote_BK_63'><sup>[BK]</sup></a> and in 1870 a Parliamentary
+inquiry into their grievances was made. It appeared that shipbuilders,
+though enabled to import free such materials as they needed, were
+handicapped by numerous and extensive formalities; while the outfitters
+were embarrassed by special burdens which the law laid upon them, and
+which their British competitors did not have to bear.<a name='FNanchor_BL_64'></a><a href='#Footnote_BL_64'><sup>[BL]</sup></a> In 1872 laws
+were passed which reversed much of <a name='Page_29'></a>the act of 1866. A tax of from
+thirty to fifty francs a ton measurement was re-imposed on all foreign
+ships purchased for registration in France, together with a duty on
+marine engines; again a tonnage duty, of from fifty centimes to one
+franc, was imposed on ships of any flag coming from a foreign country or
+from the French colonies; and the provisions freeing materials for ship
+construction, and admitting foreign-built ships to French registration
+upon payment of the two-franc tax per ton, were repealed.<a name='FNanchor_BM_65'></a><a href='#Footnote_BM_65'><sup>[BM]</sup></a> In 1873 an
+extra-parliamentary commission took up the general question of the state
+of the commercial marine,<a name='FNanchor_BN_66'></a><a href='#Footnote_BN_66'><sup>[BN]</sup></a> and the outcome of this inquiry was the
+establishment of the system of direct bounties. This system was applied
+for the first time in the Merchant Marine Act passed in January, 1881.</p>
+
+<p>The act of 1881 granted both construction and navigation premiums, and
+was limited to ten years. The construction bounties, as was declared,
+were given &quot;as compensation for the increased cost which the customs
+tariff imposed on shipbuilders&quot; in consequence of the repeal of the law
+granting free import of materials by construction; the navigation
+bounties, &quot;for the purpose of compensating the mercantile navy for the
+service it renders the country in the recruitment of the military navy.&quot;
+The construction bounties, on gross tonnage, were as follows: for wooden
+ships of less than 200 tons, ten francs a ton; of more than 200 tons,
+twenty francs; for composite ships, that is, ships with iron or steel
+beams and wooden sides, forty francs a ton; for iron or steel ships,
+sixty francs; for engines placed on steamers, and for boilers and other
+auxiliary apparatus, twelve francs per 100 kilograms; for renewing
+boilers, eight francs per 100 kilograms of new material used; for any
+modification of a ship increasing its tonnage, the above rates on the
+net increase of tonnage.<a name='FNanchor_BO_67'></a><a href='#Footnote_BO_67'><sup>[BO]</sup></a> The navigation bounties were confined to
+ships engaged in the foreign trade, and were to be reduced annually
+during the ten <a name='Page_30'></a>years' term of the law.<a name='FNanchor_BP_68'></a><a href='#Footnote_BP_68'><sup>[BP]</sup></a> They were thus fixed: for
+French-built ships, one franc and fifty centimes a registered ton for
+every thousand sea miles sailed the first year, the rate to diminish
+each succeeding year of the term seven francs and fifty centimes on
+wooden ships, and five centimes on iron and steel ships; for
+foreign-built ships owned by Frenchmen admitted to registry, one-half
+the above rates; for French-built steamers constructed according to
+plans of the Navy Department, an increase of fifteen per cent above the
+ordinary rate.<a name='FNanchor_BQ_69'></a><a href='#Footnote_BQ_69'><sup>[BQ]</sup></a></p>
+
+<p>The first effect of this law was to stimulate the organization of a
+number of new steamship companies, and to occasion activity in various
+ship-yards, foreign (English) as well as home, in building steamships
+for their service.<a name='FNanchor_BR_70'></a><a href='#Footnote_BR_70'><sup>[BR]</sup></a> Most of the domestic-built iron and steam tonnage
+produced during the law's ten years' term was of steamers.<a href='#Footnote_BS_71'><sup>[BS]</sup></a> The
+tonnage of steamships increased from 278,000 tons in 1880 to 500,000
+tons in 1890. Of this increase more than three-fifths were represented
+by vessels bought in other countries.<a name='FNanchor_BT_72'></a><a href='#Footnote_BT_72'><sup>[BT]</sup></a> The results of the navigation
+bounties are shown in official statistics covering the years 1882-1890.
+During this period iron or steel French-built ships earning these
+bounties increased from 159,714 tons to 190,831 tons, gross tonnage;
+while wooden or composite tonnage decreased from 150,233 tons to 57,068
+gross. Foreign-built iron or steel tonnage earning the bounties
+increased from 43,787 tons to 91,170 tons, gross; and wooden or
+composite tonnage increased from 1,220 tons to 9,799 tons, gross.<a href='#Footnote_BS_71'><sup>[BS]</sup></a> In
+1891 the law which had then reached its limit of ten years was extended
+for two years. Doubting its renewal shipowners had sometime before
+ceased to increase their fleets.<a name='FNanchor_BS_71'></a><a href='#Footnote_BS_71'><sup>[BS]</sup></a></p>
+
+<p>These results were variously pronounced unsatisfactory, and a revised or
+a new law was called for, with more and higher bounties. Owners of
+wooden sailing-ships were especially clamorous for larger benefits. They
+argued that sailing-ships being much slower than steamers should
+there<a name='Page_31'></a>fore receive higher mileage subsidies in order to compete on equal
+terms with steamships.<a name='FNanchor_BU_73'></a><a href='#Footnote_BU_73'><sup>[BU]</sup></a></p>
+
+<p>A new law was enacted in 1893 (January 30). This act cut off bounties to
+foreign-built ships, and granted increased construction premiums. The
+construction subsidies were again declared to be given as &quot;compensation
+for the charges imposed on shipbuilders by the customs tariff&quot;; the
+navigation bounties, &quot;by way of compensation for the burden imposed on
+the merchant marine as an instrument for recruiting the military
+marine.&quot; The construction subsidies were not to be definitely earned
+till the ships were registered as French; and by ships built in France
+for foreign mercantile fleets, not till they had been delivered. The
+navigation bounties were accorded to French-built ships, of more than 80
+tons for sailing-ships, and 100 tons gross for steamers, engaged in
+making long voyages and in international coasting; and were limited to
+ten years. They were based on gross tonnage per thousand sailed miles.
+To merchant steamships built in accordance with plans approved by the
+Navy Department, the rate of fifteen per cent above the regular
+navigation bounty provided in the law of 1881, was increased to
+twenty-five per cent. All ships receiving the navigation bounty were
+subject to impressment in case of war.<a name='FNanchor_BV_74'></a><a href='#Footnote_BV_74'><sup>[BV]</sup></a></p>
+
+<p>The effect of this law appears to have been a division of the interests
+of shipowners and shipbuilders. The shipowners found the builders
+constantly increasing their prices until a point was reached where they
+were accused of absorbing both premiums for construction and navigation,
+by calculating the amount of bounty which proposed construction would
+demand, and adding that amount to their cost price.<a name='FNanchor_BW_75'></a><a href='#Footnote_BW_75'><sup>[BW]</sup></a> The increase of
+the bounty on sailing-ships was made in the expectation that it would
+check their falling off, which had been rapid since the development of
+steamship building; merchant sailing-ships were regarded as the best
+school for seamen, all of whom in French commerce,<a name='Page_32'></a> up to the age of
+forty-five, are subject at any time to draft into the national navy. It
+did this and more. There resulted the &quot;strange phenomenon,&quot; as Professor
+Viallat&eacute;s puts it, &quot;of a steady increase in the sailing-fleet, while the
+number of steam-ships remained stationary.&quot;<a href='#Footnote_BX_76'><sup>[BX]</sup></a></p>
+
+<p>Thus, like its predecessor, unsatisfactory, the law of 1893 was
+succeeded by another act further enlarging the bounty system. This law
+was promulgated in 1902 (April 7). It provided three classes of bounty:
+construction and navigation as before, and &quot;commission compensation&quot; or
+&quot;shipping premiums.&quot; The construction bounty remained as in previous
+law. The navigation bounty, now introduced as awarded &quot;as a general
+compensation for the charges imposed on the merchant navy, and for the
+excessive cost of vessels built in France,&quot; was increased.<a name='FNanchor_BY_77'></a><a href='#Footnote_BY_77'><sup>[BY]</sup></a> It was
+payable to all French-built sea-going ships, steam and sailing, of over
+100 tons gross, and less than fifteen years old, and was limited to
+twelve years. To stimulate speed development, only ships showing a trial
+speed of at least twelve knots with half load were to receive the full
+navigation bounty; to those making less than twelve knots the bounty was
+diminished by five per cent; to those making less than eleven, by ten
+per cent. The shipping bounty was declared to be granted &quot;as
+compensation for the charges imposed on the mercantile marine&quot; by making
+merchant vessels practically schools for seamen. It was a &quot;chartered
+allowance&quot; made to foreign-built iron or steel steamers manned under the
+French flag for long voyages or for international coastwise trade, of
+more than 100 gross tons, belonging to French private persons or
+joint-stock or other companies, the latter having on their boards a
+majority of French citizens, and the chairman and managers being French.
+This allowance was reckoned on the gross tonnage, and per day while the
+steamer was in actual commission (three hundred days the maximum number
+in any one year).<a name='FNanchor_BX_76'></a><a href='#Footnote_BX_76'><sup>[BX]</sup></a> The rate varied according to the tonnage. Up to
+2000 tons gross, it was fixed at five centimes per ton; from 2000 to
+3000 tons, at four centimes; 3000 to 4000, three <a name='Page_33'></a>centimes; above 4000,
+two centimes; over 7000, the same grant as 7000. The creation of this
+&quot;chartered allowance,&quot; as Professor Viallat&eacute;s explains, was to prevent
+the navigation bounty from becoming to the same extent as under the
+previous law merely another form of bounty upon shipbuilding. It could
+so become, he points out, only to the extent of which it exceeded the
+owner's bounty.<a name='FNanchor_BZ_78'></a><a href='#Footnote_BZ_78'><sup>[BZ]</sup></a></p>
+
+<p>Not all of the shipping and navigation bounties were to go to
+shipowners. Five per cent was to be retained for sailors' insurance
+&quot;with a view to reducing the deductions imposed on them for the purpose
+of that insurance&quot;; and six per cent to be reserved for distribution for
+the benefit of marines, as follows: &quot;two-thirds to the provident fund,
+with a view to diminishing the deductions on mariners' pay and to
+increasing the funds for assisting the victims of shipwreck and other
+accidents, or their families; one-third to the invalids' fund, with a
+view to granting subventions to the chambers of commerce or public
+institutions for the creation and support of sailors' homes in French
+ports, intended to assist the nautical population, or of any other
+institutions likely to be of use to them, especially schools for
+seamen.&quot; The requirement in the old law of 1793 as to the composition of
+the crews of French merchant ships was modified, reducing the proportion
+of sailors who must be Frenchmen.</p>
+
+<p>French-built ships were privileged to chose between the shipping and the
+navigation bounties. To obtain the shipping bounty for the maximum of
+three hundred days steamers must make during the year a minimum of
+thirty-five thousand miles if engaged in the overseas trade, or
+twenty-five thousand if in &quot;<i>cabotage international</i>.&quot;<a name='FNanchor_CA_79'></a><a href='#Footnote_CA_79'><sup>[CA]</sup></a> Shipowners
+agreeing to maintain on routes not served by the subsidized main
+steamers a regular line, performing a fixed minimum of journeys per
+year, with vessels of a certain age and tonnage, were permitted to
+claim, in lieu of the regular bounties, a fixed subsidy during the term
+of their agreement, equal to the average of the bounties to which the
+vessels <a name='Page_34'></a>in commission would be entitled for the whole of the journeys
+performed. The new tonnage to be admitted to the benefit of the law was
+limited to three hundred thousand gross tons of steamers and one hundred
+thousand gross tons of sailing-ships; of which new tonnage freight-built
+ships could form two-fifths. The appropriation for the payment of the
+bounties was also limited, to guard against a too heavy burden upon the
+national treasury. This was fixed at two hundred million francs: one
+hundred and fifty million for the shipping and navigation bounties and
+fifty million for the construction bounties.<a name='FNanchor_CB_80'></a><a href='#Footnote_CB_80'><sup>[CB]</sup></a></p>
+
+<p>Unforeseen results of an unsatisfactory nature followed the application
+of this law. Professor Viallat&eacute;s effectively states them in the fewest
+words:</p>
+
+<div class='blkquot'><p>&quot;To be sure of profiting by the advantages of the law the
+     ship-owners hastened to order vessels and to place them on the
+     stocks. Their haste increased when it was seen that there existed
+     a considerable discrepancy between the allowed tonnage and the
+     money appropriated. The appropriation of one hundred and fifty
+     million francs, opened to assure the payment of the navigation
+     bounties and the compensation for outfit, was much too little.
+     The rush was such, as soon as this formidable mistake was
+     discovered, that, less than nine months after its promulgation,
+     from December 20, 1902, the useful effect of the law was
+     completely exhausted.&quot;! </p></div>
+
+<p>Thereupon resort was had to another Extra-Parliamentary commission to
+frame another system. The result was a law of 1906 (April), which
+separated the shipbuilder from the shipowner. The provisions for the
+construction bounty were redrawn with the object, as Professor Viallat&eacute;s
+explains,<a name='FNanchor_CC_81'></a><a href='#Footnote_CC_81'><sup>[CC]</sup></a> &quot;not only to equalize the customs duties affecting the
+materials employed, but also to give the builders a compensation
+sufficient to enable them to concede to the French shipowners the same
+prices as foreign builders.&quot; The rates were thus fixed on gross
+measurement: for iron and steel steamships, one hundred and forty-five
+francs per ton; for sailing-ships, ninety-five francs per ton: these
+bounties to decrease annually to four francs and fifty centimes for
+steamships and three francs ninety centimes for sailing-ships during the
+first ten years of the law's application, <a name='Page_35'></a>thereafter to stand at one
+hundred francs and sixty-five francs, respectively; for engines and
+auxiliary apparatus, twenty-seven francs fifty centimes per hundred
+kilograms. The navigation bounty to owners of French or foreign-built
+ships under the French flag, was calculated per day of actual running:
+for steamships, four centimes per ton gross up to 3000 tons; three
+centimes more up to 6000; two more to 6000 and above; for sailing-ships,
+three centimes per ton up to 500 tons, two more up to 1000, and one more
+to 1000 and above. This bounty to continue for the first twelve years of
+the law. The provisions for fostering speed development in steamships
+excluded from compensation those making on trial, half laden, less than
+nine knots, in place of ten in the previous law; reduced the rate to
+fifteen per cent of the bounty for those showing more than nine and less
+than ten knots; and increased this rate by ten per cent for those making
+at least fourteen knots, by twenty-five per cent for fifteen knots, and
+thirty per cent for sixteen knots. The extra bounty equal to twenty-five
+per cent of the regular navigation bounty to steamships constructed on
+plans approved by the Navy Department, and the provision making all
+merchant ships subject to requisition by the Government in case of war,
+were retained as in previous laws.<a name='FNanchor_CD_82'></a><a href='#Footnote_CD_82'><sup>[CD]</sup></a> This is the law at present in
+force.</p>
+
+<p>The total cost of the French bounty system in the twenty-four years from
+its establishment with the law of 1881 to 1904, when the law of 1902 had
+practically run out, was in round numbers upward of three hundred and
+eighty-one million francs. Professor Viallat&eacute;s shows that the new law of
+1906 would absorb during the first seven years of its application,
+upward of eighty-four million francs.<a name='FNanchor_CE_83'></a><a href='#Footnote_CE_83'><sup>[CE]</sup></a></p>
+
+<p>These construction and navigation bounties are exclusive of the
+subventions to steamships for carrying the mails. The establishment of
+the French postal ocean steamship subsidy system dates back to 1857,
+when a contract was made with the Union Maritime Company for a service
+to New York, Mexico, and the West Indies. The assertion is made by
+Professor Meeker that the French postal sub<a name='Page_36'></a>ventions paid &quot;ostensibly
+for the furtherance of the mails,&quot; are &quot;both greater in amount and more
+influential upon shipbuilding, navigation, and commerce than are the
+general premiums upon shipbuilding and navigation.&quot;<a name='FNanchor_CF_84'></a><a href='#Footnote_CF_84'><sup>[CF]</sup></a> Says Viallat&eacute;s:</p>
+
+<div class='blkquot'><p>&quot;The system is calculated to secure regular and rapid postal
+     communication with certain countries beyond seas, and at the same
+     time to constitute an auxiliary fleet capable of being utilized
+     by the navy in times of war. The existence of fixed lines with
+     constant service is also a means of favoring the expansion of the
+     national commerce. The State obtains, moreover, in exchange for
+     the subsidy, direct advantages; the free carriage of the mails
+     and the funds of the public treasury; transport of officials at a
+     reduced price, and of arms and stores destined for the service of
+     the State.&quot; </p></div>
+
+<p>Meeker:</p>
+
+<div class='blkquot'><p>&quot;The greater part of the concealed subventions undoubtedly goes
+     to the shipbuilders, for all mail contract steamers must be built
+     in French yards and of French materials. These first costs are
+     estimated to be from twenty-five to fifty per cent greater in
+     France than in England.&quot;<a href='#Footnote_CG_85'><sup>[CG]</sup></a> </p></div>
+
+<p>There is no competition in the letting of the French mail contracts.
+They go to four steamship concerns. For many years more than one half of
+the total steam tonnage of France has been owned by these four
+subsidized lines: the <i>Compagnie G&eacute;n&eacute;rale Transatlantique</i>, the
+<i>Compagnie des Messag&eacute;ries Maritimes</i>, the <i>Chargeurs R&eacute;unis</i>, and the
+<i>Compagnie Fraissant</i>.<a name='FNanchor_CG_85'></a><a href='#Footnote_CG_85'><sup>[CG]</sup></a></p>
+
+<p>The great ship-yards have developed a capacity for building steamships
+of the largest class. The tonnage since 1881, when it had fallen to
+914,000 tons, had increased only to 1,052,193 tons in 1900. By 1910-11,
+it had reached 1,882,280 tons.<a name='FNanchor_CH_86'></a><a href='#Footnote_CH_86'><sup>[CH]</sup></a> The total mail subsidies average, in
+round numbers, five million dollars a year, while the construction and
+navigation bounties amount to three and a half million dollars
+additional.</p>
+
+<p>Practically every French vessel floating the French flag and engaged in
+foreign trade either receives or has received subsidies, or bounties,
+from the Government.<a name='FNanchor_CI_87'></a><a href='#Footnote_CI_87'><sup>[CI]</sup></a></p>
+
+<p>FOOTNOTES:</p>
+
+<a name='Footnote_BD_56'></a><a href='#FNanchor_BD_56'>[BD]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_BE_57'></a><a href='#FNanchor_BE_57'>[BE]</a><div class='note'><p> Lindsay, vol. III.</p></div>
+
+<a name='Footnote_BF_58'></a><a href='#FNanchor_BF_58'>[BF]</a><div class='note'><p> Rear-Admiral Alfred T. Mahan, &quot;The Influence of Sea Power
+upon History,&quot; pp. 105-107.</p></div>
+
+<a name='Footnote_BG_59'></a><a href='#FNanchor_BG_59'>[BG]</a><div class='note'><p> Mahan, p. 73.</p></div>
+
+<a name='Footnote_BH_60'></a><a href='#FNanchor_BH_60'>[BH]</a><div class='note'><p> Lindsay, vol. III.</p></div>
+
+<a name='Footnote_BI_61'></a><a href='#FNanchor_BI_61'>[BI]</a><div class='note'><p> Prof. Achille Viallat&eacute;s, &quot;How France Protects Her Merchant
+Marine,&quot; in North American Review, vol. 184, 1907.</p></div>
+
+<a name='Footnote_BJ_62'></a><a href='#FNanchor_BJ_62'>[BJ]</a><div class='note'><p> Lindsay, vol. III.</p></div>
+
+<a name='Footnote_BK_63'></a><a href='#FNanchor_BK_63'>[BK]</a><div class='note'><p> Lindsay, vol. III, also Viallat&eacute;s.</p></div>
+
+<a name='Footnote_BL_64'></a><a href='#FNanchor_BL_64'>[BL]</a><div class='note'><p> Viallat&eacute;s.</p></div>
+
+<a name='Footnote_BM_65'></a><a href='#FNanchor_BM_65'>[BM]</a><div class='note'><p> Lindsay, vol. III, pp. 457-458.</p></div>
+
+<a name='Footnote_BN_66'></a><a href='#FNanchor_BN_66'>[BN]</a><div class='note'><p> Viallat&eacute;s.</p></div>
+
+<a name='Footnote_BO_67'></a><a href='#FNanchor_BO_67'>[BO]</a><div class='note'><p> Meeker. Also Wells, pp. 163-164, <i>note</i>.</p></div>
+
+<a name='Footnote_BP_68'></a><a href='#FNanchor_BP_68'>[BP]</a><div class='note'><p> Wells, pp. 163-164, <i>note.</i></p></div>
+
+<a name='Footnote_BQ_69'></a><a href='#FNanchor_BQ_69'>[BQ]</a><div class='note'><p> Meeker. Also Wells.</p></div>
+
+<a name='Footnote_BR_70'></a><a href='#FNanchor_BR_70'>[BR]</a><div class='note'><p> Wells, p. 164.</p></div>
+
+<a name='Footnote_BS_71'></a><a href='#FNanchor_BS_71'>[BS]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_BT_72'></a><a href='#FNanchor_BT_72'>[BT]</a><div class='note'><p> Viallat&eacute;s.</p></div>
+
+<a name='Footnote_BU_73'></a><a href='#FNanchor_BU_73'>[BU]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_BV_74'></a><a href='#FNanchor_BV_74'>[BV]</a><div class='note'><p> For this law see Meeker.</p></div>
+
+<a name='Footnote_BW_75'></a><a href='#FNanchor_BW_75'>[BW]</a><div class='note'><p> U.S. Consul Robert Skinner, Marseilles; Con. Repts., xol.
+XVIII (1900), p. 36.</p></div>
+
+<a name='Footnote_BX_76'></a><a href='#FNanchor_BX_76'>[BX]</a><div class='note'><p> Viallat&eacute;s.</p></div>
+
+<a name='Footnote_BY_77'></a><a href='#FNanchor_BY_77'>[BY]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_BZ_78'></a><a href='#FNanchor_BZ_78'>[BZ]</a><div class='note'><p> North American Review, vol. CLXXXIV, 1907.</p></div>
+
+<a name='Footnote_CA_79'></a><a href='#FNanchor_CA_79'>[CA]</a><div class='note'><p> Embracing voyages within the limits of the ports of the
+Mediterranean, North Africa, and Europe below the Arctic
+circle&mdash;Meeker.</p></div>
+
+<a name='Footnote_CB_80'></a><a href='#FNanchor_CB_80'>[CB]</a><div class='note'><p> Meeker and Viallat&eacute;s, summaries of this law.</p></div>
+
+<a name='Footnote_CC_81'></a><a href='#FNanchor_CC_81'>[CC]</a><div class='note'><p> North American Review, vol. CLXXXIV, 1907.</p></div>
+
+<a name='Footnote_CD_82'></a><a href='#FNanchor_CD_82'>[CD]</a><div class='note'><p> For this law see Senate Doc. no. 488, 59th Cong., 1st
+sess.</p></div>
+
+<a name='Footnote_CE_83'></a><a href='#FNanchor_CE_83'>[CE]</a><div class='note'><p> North American Review, vol. CLXXXIV, 1907.</p></div>
+
+<a name='Footnote_CF_84'></a><a href='#FNanchor_CF_84'>[CF]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_CG_85'></a><a href='#FNanchor_CG_85'>[CG]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_CH_86'></a><a href='#FNanchor_CH_86'>[CH]</a><div class='note'><p> Lloyd's Register, 1910-11.</p></div>
+
+<a name='Footnote_CI_87'></a><a href='#FNanchor_CI_87'>[CI]</a><div class='note'><p> Senate Rept., no. 10, 59th, Cong., 1st sess.</p></div>
+
+
+
+<hr style='width: 65%;' />
+<a name='CHAPTER_IV'></a><h2><a name='Page_37'></a>CHAPTER IV</h2>
+
+<p style='text-align: center;'>GERMANY</p>
+<br />
+
+<p>Germany was a close follower of France in the adoption of the direct
+ship bounty system. Only two months after the promulgation of the
+initial French law of 1881, Bismarck brought the question before the
+Reichstag, with an exhibit of this act. In an elaborate memorial (April
+6, 1881) he reviewed the general subject of State bounties and subsidies
+to shipping in various maritime countries, and closed with this pointed
+declaration: &quot;It is deserving of serious consideration whether, under
+the circumstances as given, German shipping and German commerce can
+hope&quot; for further prosperous developments as against the competition of
+other nations aided by public funds and assistance.<a name='FNanchor_CJ_88'></a><a href='#Footnote_CJ_88'><sup>[CJ]</sup></a></p>
+
+<p>At this time the German marine was represented by a substantial fleet of
+merchant steamships, but all were foreign-built, mostly from British
+ship-yards. The Government was paying only a postal subsidy of about
+forty-seven thousand dollars&mdash;a sum in proportion to the weight of the
+parcels forwarded&mdash;in the overseas trade to the participating German
+steam lines. A first step had been taken indirectly in favor of domestic
+shipbuilding six years earlier (1879), when Bismarck, in introducing the
+general protective system, exempted this industry, and free entry was
+permitted to German ship-yards of materials used in the construction and
+equipment of merchant as well as of war-ships, which then were only on
+the domestic stocks.<a name='FNanchor_CK_89'></a><a href='#Footnote_CK_89'><sup>[CK]</sup></a> Bismarck's proposal of 1881, to meet French
+subsidies with German subsidies, was avowedly with the single object of
+promoting with State aid a German mercantile marine.</p>
+
+<p>The project was brought before the Reichstag early in <a name='Page_38'></a>1884 and warmly
+discussed. Earnest protests were raised against it by shipping merchants
+of the chief German seaports;<a name='FNanchor_CL_90'></a><a href='#Footnote_CL_90'><sup>[CL]</sup></a> while earnest support came from other
+merchants and varied interests. The initial proposal was for the
+establishment of a subsidized mail service by German steamships. It
+contemplated an annual subsidy of four million marks, with fifteen
+years' contracts, for such service between Germany and Australia and
+East Asia. The measure was defeated in the Reichstag that year. Brought
+forward the next year (1885), and in a new form, it was finally enacted
+in April and went into effect the following July.</p>
+
+<p>This law increased the annual subsidy from four million marks as first
+proposed to four million four hundred thousand marks, of which one
+million seven hundred thousand was offered for the East Asian line, to
+China and Japan; two million three hundred thousand for the Australian
+line, and four hundred thousand for a branch line connecting Trieste
+with the Australian line at Alexandria. The contracts in accordance with
+it all went to the North German Lloyd Company, of Bremen. The convention
+between the Government and this company required that the new vessels to
+be furnished must be built in German yards and of German material. The
+coal supply was, as far as practicable, to be of German product. The
+chancellor was empowered to take over all the company's steamers for the
+mobilization of the navy, at their full value, or on hire at proper
+compensation. The sale or loan of a steamer to a foreign power could be
+made only by permission of the chancellor. The number of voyages to be
+made on each line yearly, and the rate of speed, were set down in
+careful detail. Failure to observe the table of voyages, without
+sufficient reason, subjected the company to heavy penalties. All persons
+employed in connection with the mail service were, if practicable, to be
+German subjects. All officers in the service of the empire, relief
+crews, weapons, ammunition, equipments, or supplies for the imperial
+navy, were to be carried at twenty per cent under the regular
+tariff.<a name='FNanchor_CM_91'></a><a href='#Footnote_CM_91'><sup>[CM]</sup></a></p>
+
+<p><a name='Page_39'></a>Subsequent laws made additions to the free list of raw and manufactured
+shipbuilding material; and preferential rates on the State railroads
+were arranged for the transportation of steel, iron, timber, from the
+interior, where these are found at an average distance of some four
+hundred miles from the coast, to the ship-yards.<a name='FNanchor_CN_92'></a><a href='#Footnote_CN_92'><sup>[CN]</sup></a> Speedily large and
+superior steamships were designed and turned out from the enlarged
+ship-yards, the first ocean flyer being the <i>Auguste Victoria</i> for the
+Hamburg-American Line. In 1890 a subsidy of ninety thousand marks
+annually was granted for an East African line on a ten-years' contract.
+Within less than six years the establishment of a fortnightly Asiatic
+service was agitated; and in 1896 a bill granting a yearly subsidy of
+one million four hundred thousand marks therefor, was brought before the
+Reichstag. If this were forthcoming the North German Lloyd agreed,
+besides furnishing the fortnightly service, to increase the speed of
+their steamers, to send ships direct to Japan, and to meet all
+requirements of the Admiralty with respect to ships and crews.<a href='#Footnote_CO_93'><sup>[CO]</sup></a></p>
+
+<p>Now the advocates of further subsidies maintained that the policy
+instituted with the law of 1885 had proved its effectiveness. The
+indirect advantages from the subventions were claimed to be quite as
+great as the direct. While before 1885 all large ships for German
+companies had been ordered in England, now all large ships for the
+German transatlantic lines were built in Germany.<a name='FNanchor_CO_93'></a><a href='#Footnote_CO_93'><sup>[CO]</sup></a> This condition,
+the increasing activity in domestic shipbuilding, and the steady growth
+of the empire's commercial marine, were presented as conclusive evidence
+of the law's effect. Germany was now pressing into sharp rivalry with
+England, and turning out larger and speedier steamships.<a name='FNanchor_CP_94'></a><a href='#Footnote_CP_94'><sup>[CP]</sup></a> The
+increased subsidy for the China service was especially urged upon these
+grounds: the importance of placing the German mail service in the East
+on a par with the services of England and France, the benefits to
+commerce, and the aid of the national defence.<a name='FNanchor_CQ_95'></a><a href='#Footnote_CQ_95'><sup>[CQ]</sup></a></p>
+
+<p><a name='Page_40'></a>The measure met opposition at the session in which it was first
+introduced; but at the next session (1898), after amendment, it became
+law. By this act the subsidy was fixed at one million and a half marks a
+year for the extension of the East Asiatic service to China direct, and
+for making the whole service fortnightly; and the contract was extended
+for another fifteen years. It was conditioned that if foreign competing
+lines should increase the speed of their ships the North German Lloyd
+must do likewise, and without additional subsidy, unless the foreign
+companies should receive extra payments.<a name='FNanchor_CR_96'></a><a href='#Footnote_CR_96'><sup>[CR]</sup></a></p>
+
+<p>The total annual subventions for the Asiatic and Australian service had
+now reached five million five hundred and ninety thousand marks
+($1,330,420). After January, 1899, under a contract between the North
+German Lloyd and the Hamburg-American Line then made, a part of this
+subsidy went to the latter. In 1901 the subvention to the East African
+line was increased to one million three hundred and fifty thousand
+marks. Thus Germany's grand total of annual payments in postal
+subventions had reached six million nine hundred and forty thousand
+marks.</p>
+
+<p>Besides these postal subventions and the free entry to materials used in
+ship-construction and equipment, and the preferential railway rates on
+long hauls of the heavy domestic materials, barely covering the cost of
+handling and transportation,<a name='FNanchor_CS_97'></a><a href='#Footnote_CS_97'><sup>[CS]</sup></a> the Government bestows a special form
+of indirect bounty upon the subsidized steamship lines in the shape of
+largely reduced through freight rates. These include substantial
+reductions on merchandise exported from inland Germany to East Africa
+and the Levant. Thus the combined land and sea through rates are brought
+considerably below those in force on goods sent to German ports for
+direct importation.<a name='FNanchor_CT_98'></a><a href='#Footnote_CT_98'><sup>[CT]</sup></a></p>
+
+<p>Under these and other favoring conditions the German merchant marine has
+advanced in total tonnage from an insignificant place in 1880 to the
+third in rank among the <a name='Page_41'></a>maritime nations in 1911. Between 1885 and
+1900, a period of only fifteen years, its growth was tenfold.<a name='FNanchor_CU_99'></a><a href='#Footnote_CU_99'><sup>[CU]</sup></a> In
+1890 the gross tonnage stood at 928,911 tons: in 1900 it had reached a
+total of 2,159,919 tons. Steamers and sailing-ships were nearly equal in
+tonnage. German-built steamships had won the speed record in ocean
+liners. Thereafter the output of steamships became much the larger, and
+in 1906 the Government was taking measures to revive the sailing-ship
+trade, because of its value as a training-school for seamen for the
+navy.<a name='FNanchor_CV_100'></a><a href='#Footnote_CV_100'><sup>[CV]</sup></a> In 1910-11 the total tonnage was recorded at 4,333,186
+tons.<a name='FNanchor_CW_101'></a><a href='#Footnote_CW_101'><sup>[CW]</sup></a></p>
+
+<p>The other influences contributing to this extraordinary growth are
+variously stated according to the observer's point of view. The United
+States consul at Hamburg sees them in the &quot;rapid transformation of the
+country from a non-producing nation into one of the foremost industrial
+powers of Europe, a large available supply of excellent and cheap labor,
+and the geographical situation of the empire.&quot;<a name='FNanchor_CX_102'></a><a href='#Footnote_CX_102'><sup>[CX]</sup></a> The historian of
+Modern Germany sees them in German business methods:</p>
+
+<div class='blkquot'><p>&quot;The astonishing success of the German shipbuilding industry is
+     due partly to its excellent management and organization; partly
+     to the application of science and experience to industry; * * *
+     partly to the harmonious co-ordination and co-operation of the
+     various economic factors which in more individualistic countries,
+     such as Great Britain, are not co-ordinated, and often serve
+     rather to obstruct and to retard progress by unnecessary friction
+     than to provide it by harmonious action.&quot;<a name='FNanchor_CY_103'></a><a href='#Footnote_CY_103'><sup>[CY]</sup></a> </p></div>
+
+<p>FOOTNOTES:</p>
+
+<a name='Footnote_CJ_88'></a><a href='#FNanchor_CJ_88'>[CJ]</a><div class='note'><p> For this Memorial see U.S. Con. Rept., no. 112, Jan.,
+1890, pp. 108-118.</p></div>
+
+<a name='Footnote_CK_89'></a><a href='#FNanchor_CK_89'>[CK]</a><div class='note'><p> J. Ellis Barker, &quot;Modern Germany,&quot; 3rd edition, 1909.</p></div>
+
+<a name='Footnote_CL_90'></a><a href='#FNanchor_CL_90'>[CL]</a><div class='note'><p> Wells, p. 166.</p></div>
+
+<a name='Footnote_CM_91'></a><a href='#FNanchor_CM_91'>[CM]</a><div class='note'><p> U.S. Con. Rept., no. 61, 1886, pp. 285-287.</p></div>
+
+<a name='Footnote_CN_92'></a><a href='#FNanchor_CN_92'>[CN]</a><div class='note'><p> Barker, 3rd ed.</p></div>
+
+<a name='Footnote_CO_93'></a><a href='#FNanchor_CO_93'>[CO]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_CP_94'></a><a href='#FNanchor_CP_94'>[CP]</a><div class='note'><p> U.S. Con. Repts., 1889, no. 101, p. 544.</p></div>
+
+<a name='Footnote_CQ_95'></a><a href='#FNanchor_CQ_95'>[CQ]</a><div class='note'><p> Meeker. Also German report on the operation of the law of
+1885, in report of (U.S.) commissioner of navigation for 1898.</p></div>
+
+<a name='Footnote_CR_96'></a><a href='#FNanchor_CR_96'>[CR]</a><div class='note'><p> Meeker. Also German report on the operating of the law of
+1885, in report of commission of navigation for 1898.</p></div>
+
+<a name='Footnote_CS_97'></a><a href='#FNanchor_CS_97'>[CS]</a><div class='note'><p> Barker, 3rd ed.</p></div>
+
+<a name='Footnote_CT_98'></a><a href='#FNanchor_CT_98'>[CT]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_CU_99'></a><a href='#FNanchor_CU_99'>[CU]</a><div class='note'><p> Barker, 3rd ed.</p></div>
+
+<a name='Footnote_CV_100'></a><a href='#FNanchor_CV_100'>[CV]</a><div class='note'><p> U.S. Con. Rept, no. 13, July, 1906, pp. 87-89.</p></div>
+
+<a name='Footnote_CW_101'></a><a href='#FNanchor_CW_101'>[CW]</a><div class='note'><p> Lloyd's Register, 1910-11.</p></div>
+
+<a name='Footnote_CX_102'></a><a href='#FNanchor_CX_102'>[CX]</a><div class='note'><p> U.S. Consul General Robert P. Skinner, Hamburg, in Daily
+Con. Repts., April 8, 1911, no. 82.</p></div>
+
+<a name='Footnote_CY_103'></a><a href='#FNanchor_CY_103'>[CY]</a><div class='note'><p> Barker, Modern Germany, p. 490.</p></div>
+
+
+
+<hr style='width: 65%;' />
+<a name='CHAPTER_V'></a><h2><a name='Page_42'></a>CHAPTER V</h2>
+
+<p style='text-align: center;'>HOLLAND&mdash;BELGIUM</p>
+<br />
+
+<p>The home Government of the Netherlands gives neither construction nor
+navigation bounties. Only subventions to steamship lines for carrying
+the mails are granted. The single purpose of these subventions is
+declared to be to secure the prompt and effective furtherance of the
+mails at reasonable cost.<a href='#Footnote_CZ_104'><sup>[CZ]</sup></a> The contracts are not publicly let, but go
+to the several steamship lines plying to foreign ports and to the Dutch
+colonies. The amounts fixed by contract are at a given rate per voyage.
+The cost of the subventions to the Dutch East Indian lines is divided
+equally between the home and colonial Governments. Independently of the
+home Government the Dutch East Indian Government grants general mileage
+subventions for the maintenance of lines making regular communication
+with the various ports of the East Indies.<a name='FNanchor_CZ_104'></a><a href='#Footnote_CZ_104'><sup>[CZ]</sup></a> Holland's gross tonnage
+in 1910 had reached the respectable total of 1,015,193 tons,<a name='FNanchor_DA_105'></a><a href='#Footnote_DA_105'><sup>[DA]</sup></a> ranking
+her eighth among the maritime nations.</p>
+
+<hr style='width: 45%;' />
+
+<p>Belgium had a subsidy system for shipbuilding before 1852. At present
+neither bounties to domestic shipping nor postal subventions are paid by
+the Government. Subsidies, or premiums, however, are given to certain
+foreign steamship lines to encourage the commerce of Antwerp. These
+include an annual payment of eighty thousand francs ($15,440), and the
+refunding of lighterage and pilotage dues, to the North German Lloyd on
+their East Asiatic and Australian lines; and fifteen hundred francs
+($289.50) to the German-Australian line for each call to and from
+Australia, the maximum subvention limited to thirty-nine thousand francs
+($7527). A Danish steamship concern is also ex<a name='Page_43'></a>empted from lighterage
+and harbor dues and granted other facilities, but receives no money
+premiums.<a name='FNanchor_DB_106'></a><a href='#Footnote_DB_106'><sup>[DB]</sup></a> Belgium tonnage in 1910 comprised only 165 steam and
+sailing ships for a total of 299,638 tons.<a name='FNanchor_DC_107'></a><a href='#Footnote_DC_107'><sup>[DC]</sup></a></p>
+
+<p>FOOTNOTES:</p>
+
+<a name='Footnote_CZ_104'></a><a href='#FNanchor_CZ_104'>[CZ]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_DA_105'></a><a href='#FNanchor_DA_105'>[DA]</a><div class='note'><p> Lloyd's Register, 1910-11.</p></div>
+
+<a name='Footnote_DB_106'></a><a href='#FNanchor_DB_106'>[DB]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_DC_107'></a><a href='#FNanchor_DC_107'>[DC]</a><div class='note'><p> Lloyd's Register, 1910-11.</p></div>
+
+
+
+<hr style='width: 65%;' />
+<a name='CHAPTER_VI'></a><h2><a name='Page_44'></a>CHAPTER VI</h2>
+
+<p style='text-align: center;'>AUSTRIA-HUNGARY</p>
+<br />
+
+<p>The Imperial Government of Austria-Hungary spurred by the action of
+Germany, instituted a direct subsidy system, also modelled after that of
+France, in 1893, when the Austrian merchant marine was languishing.<a name='FNanchor_DD_108'></a><a href='#Footnote_DD_108'><sup>[DD]</sup></a></p>
+
+<p>A postal subsidy had long been in operation, the subsidies being all
+awarded to a single steamship company&mdash;the Austrian Lloyd, earlier the
+Austro-Hungarian Lloyd. They were practically mileage and speed
+bounties,<a name='FNanchor_DE_109'></a><a href='#Footnote_DE_109'><sup>[DE]</sup></a> increasing with the extension of service. Ten-years'
+contracts were at first made with this company. The contracts, executed
+in 1888, particularly guarded domestic interests. In the purchase of
+materials it was required that preference be given to Austro-Hungarian
+industries. The coal used must be bought from Austro-Hungarian subjects
+in the proportion of two tons from Austria and one ton from Hungary,
+provided that &quot;the price is not greater than foreign coal, and that the
+steam-producing power of the native coal is equal to at least
+eighty-four per cent of that of foreign coal.&quot; In the building and
+repairing of their ships, or parts of ships, and engines, the company
+must also favor home interests. Ships, engines, or boilers could be
+ordered abroad only with the consent of the foreign office when shown
+that the work cannot be made in Austria within proper time, or that the
+want can be supplied by a foreign country on more favorable terms.<a name='FNanchor_DF_110'></a><a href='#Footnote_DF_110'><sup>[DF]</sup></a></p>
+
+<p>By a law of July, 1891, the rates for mail-contract steamships were
+fixed as follows: for fast lines, making above ten knots, a maximum rate
+of seventy kreutzers per nautical mile; for slower lines, fifty
+kreutzers a mile. The total amount of mileage bounty payable each year
+was limited to two million nine hundred and ten thousand florins. <a name='Page_45'></a>But
+in addition to this bounty the Government agreed to pay the Suez Canal
+tolls. To encourage the Austrian Lloyd to build larger and swifter
+vessels the Government further agreed to advance the company one million
+and a half florins. This was to be furnished in three equal payments
+yearly (1891, 1892, 1893), and was to be repaid in five equal payments
+of three hundred thousand florins each, beginning in January, 1902. The
+company's ships were to be exempted from consular fees, &quot;the same as
+vessels of the imperial navy&quot;; and were to be at the disposal of the
+naval and military departments in case of war. All the officials of the
+company were to be Austrian subjects, &quot;naval officers either active or
+retired to be given the preference&quot;; and there was to be an
+administrative committee of eight members, the president appointed by
+the Emperor and two other members by the ministry of commerce, the
+intention of this provision being to give the Government control over
+the company's affairs.<a href='#Footnote_DG_111'><sup>[DG]</sup></a></p>
+
+<p>The general subsidy law of 1893 (November 28) was the outcome of the
+deliberations of a special Parliamentary committee appointed that year;
+and its declared object, as set forth in this committee's report, was
+&quot;to put a stop to the decline of our merchant fleet, to allow it to cope
+with foreign competition, and to secure for the inhabitants of our coast
+needed employment and profits in maritime pursuits.&quot;<a href='#Footnote_DG_111'><sup>[DG]</sup></a> Three years
+before (1890), with the same object in view, a preliminary step had been
+taken in the exemption of all iron and steel steam and sailing ships
+from trading and income taxes while engaged in ocean voyages.<a href='#Footnote_DG_111'><sup>[DG]</sup></a></p>
+
+<p>The law provided two classes of subsidies&mdash;a trade bounty and a
+navigation bounty. They were to go to all steamers and sailing-ships
+engaged in the deepseas trade or long-coasting trade, and not receiving
+mail subventions. At this time a large percentage of the Austrian steam
+tonnage was receiving the postal subsidies, and most of this tonnage was
+owned by the Austrian Lloyd Company.<a name='FNanchor_DG_111'></a><a href='#Footnote_DG_111'><sup>[DG]</sup></a> The trade bounty was for ships
+making long voyages; the navigation bounty for those engaged in
+coastwise voyaging. Ships <a name='Page_46'></a>entitled to the trade bounty were required to
+be owned at least two-thirds by Austrian subjects, to be not over
+fifteen years old, and registered A1 or A2. The rates were thus fixed:
+for the first year after launching, iron or steel steamers, six florins
+($2.44) per ton, iron or steel sailing-ships, four florins and fifty
+kreutzers; wooden or composite (part iron) sailing-ships, three florins.
+After the first year the rate was to be reduced five per cent annually
+till the end of the fifteenth year. As an inducement to employ home work
+and to utilize home materials, the bounty was to be increased by ten per
+cent for iron or steel sailing-ships built in the Austrian ship-yards,
+and by twenty-five per cent if at least one-half of the materials used
+in the construction were of Austrian origin. If more than one year had
+elapsed since the launching of a ship otherwise entitled to a bounty, a
+deduction of fifteen per cent was to be made for each year that had
+passed. The navigation bounty was fixed at five kreutzers per net ton of
+capacity for every hundred nautical miles sailed. The exemption from the
+production and income taxes, granted in 1890, was extended for a term of
+five years from January 1, 1894. The law was to be in force for ten
+years.</p>
+
+<p>As the end of the term of this law was approaching ship-owners began
+agitating for its renewal with an increase in the subsidy. Since its
+enactment the production of steam tonnage had been accelerated, and the
+decline of sail tonnage had been checked; but no marked change in the
+merchant marine generally had been manifest.<a name='FNanchor_DH_112'></a><a href='#Footnote_DH_112'><sup>[DH]</sup></a> Of the bounties paid
+the Austrian Lloyd had received a large share in behalf of their ships
+which were not directly under contract for the mail service. The
+remainder went to the various companies controlling the coast and river
+trade. The ten to twenty-five per cent addition to the trade bounty for
+ships built in domestic yards and from domestic materials, finally went
+for the most part to a single large building concern at Trieste. While
+most of the Austrian tonnage was yet of foreign build, mostly
+constructed in British yards, the increase in the proportion of domestic
+build was considerable <a name='Page_47'></a>after 1893. The greater part of the materials
+used was Austrian product. Consequently allied industries increased with
+this increased output of home ships.<a name='FNanchor_DI_113'></a><a href='#Footnote_DI_113'><sup>[DI]</sup></a></p>
+
+<p>At length in 1907 (February 23) a new law was enacted increasing the
+navigation and construction bounties. For the navigation subsidies, to
+go to shipowners according to the tonnage of the ships and the number of
+miles run, allotments were thus made: for the first year, $852,600; for
+1908, $893,200; 1909, $954,100; 1910, $1,015,000; 1911, $1,075,000; and
+for the five years remaining of the term, of the law&mdash;which ends
+December 31, 1916&mdash;$1,136,800 a year. The construction subsidies were
+raised as follows: for ships launched after July 1, 1907: steamers built
+of iron and steel $8.12 per gross ton, sailing-ships of iron and steel,
+$2.84; for marine engines, boilers, pipes, and auxiliary apparatus,
+$1.62 per 220.46 pounds. To entitle a ship to these bounties fifty per
+cent of the materials used in its construction must be home product.<a name='FNanchor_DJ_114'></a><a href='#Footnote_DJ_114'><sup>[DJ]</sup></a></p>
+
+<p>This year (1907) also the annual postal subventions to the Austrian
+Lloyd were increased $1,486,586, for a further period of fifteen years.
+This contract called for an increase of speed to the Levant and the
+Orient. The Suez Canal tolls were to be paid by the Government as
+before.</p>
+
+<hr style='width: 45%;' />
+
+<p>The Kingdom of Hungary grants bounties to Hungarian ships, or ships
+owned in greater part by Hungarian subjects, independently of the
+Imperial Government. Her first general bounty law was also enacted in
+1893 and was limited to ten years. The subsidies granted were of two
+classes&mdash;premium on purchase, and a mileage bounty. The purchase subsidy
+was based on net tonnage and was payable for a term of fifteen years
+from the date of the ship's launching, reduced each succeeding year by
+seven per cent; the mileage subsidy, for the same term, was in
+proportion to the length of the voyages made &quot;in the interest of
+national commerce whether to or from Hungarian ports.&quot; The premiums on
+purchase were thus fixed for the first <a name='Page_48'></a>year: for vessels employed in
+long-distance coasting trade&mdash;sailing-ships, six krone (each 20 cents);
+steamers, nine krone per ton; employed in deep-sea
+trade,&mdash;sailing-ships, nine krone; steamers, twelve krone per ton. Iron
+or steel ships rated first class were entitled to these bounties. The
+mileage subsidy was fixed at five hellers per ton, per hundred nautical
+miles run. It was offered only for voyages &quot;to places where no company
+in receipt of State subsidies is obliged to maintain regular
+communications;&quot; and it was not to be given for &quot;petty coasting
+trade.&quot;<a href='#Footnote_DK_115'><sup>[DK]</sup></a></p>
+
+<p>This law was succeeded by an act of 1895 granting construction bounties,
+with the intent of fostering domestic shipping and the use of domestic
+material. The rates were proportioned according to the amount of foreign
+or domestic material used, construction with domestic product receiving
+the highest bounty. These rates were: for iron or steel hulls, thirty to
+sixty krone per ton; for wooden ships, ten to twenty-five krone per ton;
+for engines and auxiliary machinery, ten to fifteen krone per ton of
+materials used; for boilers and pipes, six to ten krone per ton of
+material. The total amount to be paid out yearly was limited to the
+modest figure of two hundred thousand krone ($40,600).<a name='FNanchor_DL_116'></a><a href='#Footnote_DL_116'><sup>[DL]</sup></a></p>
+
+<p>The law of 1895 in reality was not effective, for ships of the Hungarian
+merchant marine continued to be built in foreign parts&mdash;mainly in
+British yards;<a href='#Footnote_DK_115'><sup>[DK]</sup></a> and while the carrying capacity had considerably
+increased, the tonnage had continued to decline.<a name='FNanchor_DK_115'></a><a href='#Footnote_DK_115'><sup>[DK]</sup></a> By 1904 the
+situation had become so unsatisfactory that, as the American consul at
+Budapest wrote, the passing of a new navigation-development law by
+Hungary's Parliament had, it was believed, become a pressing
+necessity.<a name='FNanchor_DM_117'></a><a href='#Footnote_DM_117'><sup>[DM]</sup></a></p>
+
+<hr style='width: 45%;' />
+
+<p>In 1909 the Austrian Government guaranteed a maximum sum of one million
+crowns (approximating $200,000) annually to the Austro-American Shipping
+Company for their service between Trieste and Brazil and Argentine
+ports. Should the service tend successfully to promote home in<a name='Page_49'></a>dustries
+and agriculture, this subsidy was to be increased, the amount of
+increase to depend upon the amount of cargo carried in excess of a
+certain minimum. The contract was to run for fifteen years from January
+1, 1910. The service, beginning with sailings three times a month, was
+to become weekly on January 1, 1911.<a name='FNanchor_DN_118'></a><a href='#Footnote_DN_118'><sup>[DN]</sup></a></p>
+
+<p>The total Austria-Hungary tonnage in 1910-11 was recorded at 779,029
+tons.<a name='FNanchor_DO_119'></a><a href='#Footnote_DO_119'><sup>[DO]</sup></a></p>
+
+<p>FOOTNOTES:</p>
+
+<a name='Footnote_DD_108'></a><a href='#FNanchor_DD_108'>[DD]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_DE_109'></a><a href='#FNanchor_DE_109'>[DE]</a><div class='note'><p> U.S. Con. Rept., Jan., 1890, no. 112, p. 95-96.</p></div>
+
+<a name='Footnote_DF_110'></a><a href='#FNanchor_DF_110'>[DF]</a><div class='note'><p> U.S. Con. Repts., vol. XXXII, 1890, no. 112, pp. 23-24.</p></div>
+
+<a name='Footnote_DG_111'></a><a href='#FNanchor_DG_111'>[DG]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_DH_112'></a><a href='#FNanchor_DH_112'>[DH]</a><div class='note'><p> U.S. Con. Rept., no. 282, March, 1904, pp. 645-646.</p></div>
+
+<a name='Footnote_DI_113'></a><a href='#FNanchor_DI_113'>[DI]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_DJ_114'></a><a href='#FNanchor_DJ_114'>[DJ]</a><div class='note'><p> U.S. Con. Rept., no. 320, July, 1907, p. 180.</p></div>
+
+<a name='Footnote_DK_115'></a><a href='#FNanchor_DK_115'>[DK]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_DL_116'></a><a href='#FNanchor_DL_116'>[DL]</a><div class='note'><p> Meeker. Also Parl. papers, Com., 1909, no. 4, p. 8.</p></div>
+
+<a name='Footnote_DM_117'></a><a href='#FNanchor_DM_117'>[DM]</a><div class='note'><p> U.S. Con. Rept., no. 283, April, 1904, p. 304.</p></div>
+
+<a name='Footnote_DN_118'></a><a href='#FNanchor_DN_118'>[DN]</a><div class='note'><p> U.S. Con. Rept., no. 352, Jan., 1910, p. 45.</p></div>
+
+<a name='Footnote_DO_119'></a><a href='#FNanchor_DO_119'>[DO]</a><div class='note'><p> Lloyd's Register, 1910-11.</p></div>
+
+
+
+<hr style='width: 65%;' />
+<a name='CHAPTER_VII'></a><h2><a name='Page_50'></a>CHAPTER VII</h2>
+
+<p style='text-align: center;'>ITALY</p>
+<br />
+
+<p>Early after its establishment in 1861 the Kingdom of Italy adopted a
+subsidy system with the object of reviving and upbuilding the then
+languishing Italian merchant marine. This policy was instituted in 1866
+with the grant of premiums on the construction of wooden ships. At the
+same time materials used in the construction, repair, or enlargement of
+ships were made duty-free.<a name='FNanchor_DP_120'></a><a href='#Footnote_DP_120'><sup>[DP]</sup></a></p>
+
+<p>For a while under these conditions, before iron ships had come much into
+use, the merchant marine prospered. Then it again began to languish; and
+in 1881 the promulgation of the French general bounty law was made the
+special occasion for considering the adoption of a similar measure.<a name='FNanchor_DQ_121'></a><a href='#Footnote_DQ_121'><sup>[DQ]</sup></a>
+The draft of a bill modelled after that law was promptly introduced in
+the Chamber of Deputies, in February. But with its consideration such
+perplexities arose that at length the whole subject was referred to a
+commission of inquiry, to investigate and report a more satisfactory
+one. The result of this inquiry was a bill which became law December 6,
+1885, to continue in force for ten years.</p>
+
+<p>This law provided for general construction subsidies, on the following
+scale: for steamers and sailing-ships built of iron or steel, sixty lire
+($11.58) per gross ton; for steam or sailing ships built of wood,
+fifteen lire; for <i>galleggianti</i> (floating material: the term signifying
+merchant ships navigating the Italian seaboard, rivers, and lakes, but
+not provided with certificates of nationality), of iron or steel, thirty
+lire; for construction and repairs of marine engines, ten lire per
+quintal; for marine boilers, six lire per hundred kilograms of weight.
+These bounties were to be increased from 10 to 20 per cent (according to
+the degree of speed and other desirable qualities shown) for steamers
+built on <a name='Page_51'></a>plans approved by the Government engineers as to be
+convertible into cruisers, showing a speed of not less than fourteen
+knots an hour, and with sufficient coal-carrying space to steam four
+thousand miles at ten knots. The law was applicable to ships bought
+abroad as well as those of domestic build. But it forbade the sale or
+charter to a foreigner of any steamer upon which the bounty had been
+paid, except by Government permission. The laws of 1866 granting
+premiums and free entry to shipbuilding materials were suspended during
+the ten years' term of this act.<a name='FNanchor_DR_122'></a><a href='#Footnote_DR_122'><sup>[DR]</sup></a></p>
+
+<p>In 1888, a new tariff of the previous year (July, 1887) having increased
+the customs duties on shipbuilding materials, additional bounties on
+construction and repair were granted by a royal decree to offset these
+disadvantages to the shipbuilders. A provision was added for the payment
+of fifty lire per gross ton for construction of war-ships, and eight and
+a half-lire per horsepower for engines, nine and a half lire per quintal
+for boilers, and eleven lire per quintal for other apparatus, to be used
+in war-ships. Navigation bounties were also added to Italian ships as
+follows: 0.65 lire per gross ton for every thousand sea miles run beyond
+the Suez Canal or the Strait of Gibraltar to or from ports outside of
+Europe; the same for ships sailing between one continent with its
+adjacent islands and another continent with its adjacent islands,
+outside the Mediterranean. Sailing-ships of above fifteen years of age
+were ineligible to these bounties; so also were mail-route steamers.<a href='#Footnote_DS_123'><sup>[DS]</sup></a></p>
+
+<p>In 1896, after the expiration of this law, a new law was enacted (July
+23) closely modelled upon it. The construction subsidies were the same,
+except that war-ships built for foreign countries were debarred from
+receiving bounties. The navigation subsidy per gross ton for every
+thousand sea miles sailed beyond the Suez Canal and the Strait of
+Gibraltar was increased to 0.80 lire, the rate to be diminished by ten
+centimes for steamers and fifteen centimes for sailing-ships every three
+years. An important addition was the re&euml;nactment of the customs rebates
+on shipbuilding materials. This law was also to be in force ten
+years.<a name='FNanchor_DS_123'></a><a href='#Footnote_DS_123'><sup>[DS]</sup></a></p>
+
+<p><a name='Page_52'></a>In 1900 (November 16) a royal decree was issued modifying the law of
+1896 in several particulars. No bounty was hereafter to be allowed to
+vessels built in Italian yards for foreigners. The customs drawbacks
+were abrogated, and in place of them was granted a bounty of five lire
+per quintal of metal used in repairs. A bounty of fifty-five lire per
+gross ton was offered for iron or steel steamers showing a speed of
+above fifteen knots; fifty lire, for steamers speeding twelve to fifteen
+knots; forty-five lire, for steamers or sailing-ships with speed below
+twelve knots; and thirteen lire per net ton for modern hulls. The
+navigation subsidies per gross ton per thousand miles, were thus fixed:
+for steamers, forty centimes up to the fifteenth year after
+construction; for sailing-ships, twenty centimes up to the twenty-first
+year after construction. The yearly distances run for which the bounties
+were to be paid were limited to thirty-two thousand miles for a steamer
+below twelve knots; forty thousand for one of twelve to fifteen knots;
+fifty thousand above fifteen knots, and ten thousand for a sailing-ship.
+All Italian ships were eligible to this bounty; foreign ships were
+debarred. The maximum expenditure for all the bounties was limited to
+ten million lire ($2,000,000) a year.</p>
+
+<p>In 1910 (May) a new subsidy bill was enacted providing for the
+continuance of the arrangement under the measure of 1900, with a few
+immaterial modifications.<a name='FNanchor_DT_124'></a><a href='#Footnote_DT_124'><sup>[DT]</sup></a> Early in 1911 the Government was reported
+to have in readiness ten bills looking to the support of domestic
+shipping and shipbuilding. Eight of these had relation to the increase
+of subsidy on the Italian mail and cargo service of the Mediterranean.
+Other routes subsidized included lines to Central America, Chile,
+Canada. Domestic shipbuilding was to be aided to the extent of twelve
+hundred and forty thousand dollars.<a name='FNanchor_DU_125'></a><a href='#Footnote_DU_125'><sup>[DU]</sup></a></p>
+
+<p>Italy's mail subvention system dates from 1877, when the Italian
+steamship companies by a convention (July 15) consolidated with the
+Government.<a name='FNanchor_DV_126'></a><a href='#Footnote_DV_126'><sup>[DV]</sup></a> All the lines receiving <a name='Page_53'></a>the mail subsidy came to be
+owned by a single powerful corporation, the Italian General Navigation
+Company. While the rates paid per mile are not so high as those paid by
+several other countries, the requirements as to size of vessels, speed,
+and amount of service to be rendered, are less exacting. Accordingly
+these subventions are in fact, as Professor Meeker recognizes them,
+&quot;partly in the nature of concealed bounties.&quot; In 1879 the Government
+spent in these subventions a total equalling $1,593,214. By 1889 the
+total had only slightly increased, the amount that year being
+$1,849,392. In 1908 the total was $2,328,917. The mail steamships are
+required to carry government civil and military employees at half price.</p>
+
+<p>Previous to 1896 the Italian General Navigation Company owned more than
+half of the Italian steam tonnage, and most of the large steamships.<a name='FNanchor_DW_127'></a><a href='#Footnote_DW_127'><sup>[DW]</sup></a>
+After 1896 the sail tonnage steadily increased. In 1905 it was recorded
+that &quot;the Italian flag now flies over some of the best modern
+transatlantic liners in the port of New York; the Mediterranean is full
+of Italian ships; and the Lloyd Italiano has five new ten-thousand-ton
+steamers nearly ready for service in South America.&quot;<a name='FNanchor_DX_128'></a><a href='#Footnote_DX_128'><sup>[DX]</sup></a> Between 1890
+and 1910 the Italian gross tonnage increased from 809,598 tons to
+1,320,653 tons.<a name='FNanchor_DY_129'></a><a href='#Footnote_DY_129'><sup>[DY]</sup></a></p>
+
+<p>FOOTNOTES:</p>
+
+<a name='Footnote_DP_120'></a><a href='#FNanchor_DP_120'>[DP]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_DQ_121'></a><a href='#FNanchor_DQ_121'>[DQ]</a><div class='note'><p> Bismarck's Memorial to the German Reichstag, April, 1881.</p></div>
+
+<a name='Footnote_DR_122'></a><a href='#FNanchor_DR_122'>[DR]</a><div class='note'><p> U.S. Con. Rept., Jan., 1890, no. 112, pp. 61-62. Also
+Meeker.</p></div>
+
+<a name='Footnote_DS_123'></a><a href='#FNanchor_DS_123'>[DS]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_DT_124'></a><a href='#FNanchor_DT_124'>[DT]</a><div class='note'><p> U.S. Consul J. K. Wood, Venice, in Daily Con. Repts., no.
+30, Aug 9, 1910.</p></div>
+
+<a name='Footnote_DU_125'></a><a href='#FNanchor_DU_125'>[DU]</a><div class='note'><p> U.S. Consul T. St. J. Gaffney, Dresden, Germany, in Daily
+Con. Repts., no. 83, April 10, 1911.</p></div>
+
+<a name='Footnote_DV_126'></a><a href='#FNanchor_DV_126'>[DV]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_DW_127'></a><a href='#FNanchor_DW_127'>[DW]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_DX_128'></a><a href='#FNanchor_DX_128'>[DX]</a><div class='note'><p> U.S. Senate Rept., no. 10, 59th Cong., 1st sess.</p></div>
+
+<a name='Footnote_DY_129'></a><a href='#FNanchor_DY_129'>[DY]</a><div class='note'><p> Lloyd's Register, 1910-11.</p></div>
+
+
+
+<hr style='width: 65%;' />
+<a name='CHAPTER_VIII'></a><h2><a name='Page_54'></a>CHAPTER VIII</h2>
+
+<p style='text-align: center;'>SPAIN&mdash;PORTUGAL</p>
+<br />
+
+<p>Spain instituted a ship-construction bounty system in 1880, when her
+merchant marine was languishing, and in 1886 a comprehensive system of
+mail subventions, contracting for the whole ocean service with a single
+steamship company, <i>La Compa&ntilde;ia Transatlantica Espa&ntilde;ola</i>.</p>
+
+<p>Previous to 1886, for a quarter of a century and more, postal
+subventions had been given to private commercial houses, or individuals,
+providing steam communication with the Spanish colonies and foreign
+ports; but much of the service during that period had been performed by
+this company through cessions from the holders of the contracts. Before
+the adoption of the private contract system, the service to the colonies
+had been performed by the first regular steamship line between the
+Peninsula and the Antilles (in 1850), established at the State's
+expense. The ships of this line were all under the command of officers
+of the navy, and performed various services for the Government besides
+carrying the mails and despatches.</p>
+
+<p>Under the contract of 1886 (ratified by the Cortes in 1887) the company
+were to furnish all the mail steam communication between the Peninsula
+and the colonies and possessions, and foreign ports, for a total maximum
+subvention of 8,445,222 pesetas ($1,689,044) annually. The subsidy was
+calculated on the number of nautical miles run. The total sum was
+distributed among the budgets for the Peninsula and the several
+colonies.<a name='FNanchor_DZ_130'></a><a href='#Footnote_DZ_130'><sup>[DZ]</sup></a> In 1909 the subvention was redistributed over the various
+lines, the total amounting in round numbers to $1,665,600. The contract
+went as a whole also to the Spanish Transatlantic Company, to run for
+twenty years. A particular requirement was that the company must favor
+Spanish trade in every possible way.<a name='FNanchor_EA_131'></a><a href='#Footnote_EA_131'><sup>[EA]</sup></a></p>
+
+<p><a name='Page_55'></a>The first construction subsidy law, that of 1880 (June 25), granted a
+bounty of forty francs ($7.72) per measured ton of 2.83 cubic metres on
+all ships built in Spain. All tariff duties paid on imported materials
+for building, careening, or repairing ships or their machinery, were to
+be refunded by the Government.<a name='FNanchor_EB_132'></a><a href='#Footnote_EB_132'><sup>[EB]</sup></a></p>
+
+<p>During the decade between 1880 and 1890 the Spanish marine slowly
+increased. Further to foster it, in 1895 a more general subsidy law was
+enacted. This act granted a construction subsidy of forty pesetas
+($7.72) per gross ton for wooden ships; seventy-five pesetas ($14.48),
+for iron and steel steamers; and fifty-five pesetas ($10.62), for ships
+of mixed construction and for sailing-ships of iron and steel.<a href='#Footnote_EC_133'><sup>[EC]</sup></a></p>
+
+<p>The year following the passage of this law was marked by rapid expansion
+in the national marine. Then came a more rapid decline. This was due, it
+is assumed, to increased taxes, and business depression occasioned by
+the colonial wars, involving enlarged Government expenditures and the
+cutting off of much colonial trade.<a href='#Footnote_EC_133'><sup>[EC]</sup></a> During the war with the United
+States (1898) Spain lost eighteen large steamers of 31,316 tons. After
+that war, with the development of her national resources, the Spanish
+marine again began rapidly to grow.<a name='FNanchor_EC_133'></a><a href='#Footnote_EC_133'><sup>[EC]</sup></a></p>
+
+<p>In 1909 (law of June 14) the system was extended with the addition of
+general navigation bounties calling for an annual expenditure of
+2,750,000 pesetas ($530,750). For ships making monthly sailings to
+various named points, among them Brazil, Uruguay, and the Argentines,
+and semi-weekly sailings to Algeria, bounties were provided ranging from
+seven to seventeen cents per ton gross for every thousand miles run, to
+continue for a period of ten years. Spanish ships manned by Spanish
+crews and ranked by maritime agencies as first class were made eligible
+to them. All ships receiving these bounties must admit naval cadets and
+perform certain services for the Government. To shipbuilders, as off-set
+to the duties on imported materials which <a name='Page_56'></a>they must pay, bounties for
+port materials as well as for ships were granted by this law. The
+construction subsidies were increased to $13.84 per gross ton for wooden
+ships not possessing their own motor power, and $17.30 self-propelling;
+$20.76 for iron or steel ships without motor, $27.68 for ships for
+freight only, $29.41, freight and passengers; and $32 passengers only.
+Ten per cent of the bounties for passenger ships was to be added for
+each knot made above fourteen per hour. The sale of a ship to a
+foreigner within two years after the ship's construction was made
+invalid unless about a third of the bounty received be repaid. Ships
+built abroad for Spanish citizens were to be relieved of certain duties
+&quot;provided it appears that it was absolutely necessary that they be built
+abroad.&quot;<a name='FNanchor_ED_134'></a><a href='#Footnote_ED_134'><sup>[ED]</sup></a></p>
+
+<p>The total amount paid in mail subventions in 1910 was $1,858,186; in
+navigation subsidies, $1,291,826. The total Spanish tonnage the same
+year comprised 579 vessels of 765,460 tons.<a name='FNanchor_EE_135'></a><a href='#Footnote_EE_135'><sup>[EE]</sup></a></p>
+
+<hr style='width: 45%;' />
+
+<p>Portugal grants postal subventions of comparatively small amounts to
+three steamship companies which perform all her mail carrying. A move
+toward the institution of a general subsidy system was made in 1899,
+when a bill was before the Cortes providing construction and navigation
+bounties for the encouragement of domestic shipbuilding and ship-using;
+but this measure was not enacted. In 1911 the republic offered a subsidy
+of one thousand dollars per voyage in either direction for steamship
+service between Lisbon and New York, with call at the Azores, the
+contract to run for three years.<a name='FNanchor_EF_136'></a><a href='#Footnote_EF_136'><sup>[EF]</sup></a> Portugal controls her shipping
+service with her colonies, the trade with them being restricted to the
+Portuguese flag.<a name='FNanchor_EG_137'></a><a href='#Footnote_EG_137'><sup>[EG]</sup></a> Her total tonnage is small: in 1910 only 110,183
+tons.<a name='FNanchor_EH_138'></a><a href='#Footnote_EH_138'><sup>[EH]</sup></a></p>
+
+<p>FOOTNOTES:</p>
+
+<a name='Footnote_DZ_130'></a><a href='#FNanchor_DZ_130'>[DZ]</a><div class='note'><p> U.S. Con. Rept., no. 112, January, 1890, pp. 54-56.</p></div>
+
+<a name='Footnote_EA_131'></a><a href='#FNanchor_EA_131'>[EA]</a><div class='note'><p> U.S. Vice Con. Gen. William Dawson jr., Con. Repts., no.
+349, Oct., 1910.</p></div>
+
+<a name='Footnote_EB_132'></a><a href='#FNanchor_EB_132'>[EB]</a><div class='note'><p> U.S. Con. Repts., 1890.</p></div>
+
+<a name='Footnote_EC_133'></a><a href='#FNanchor_EC_133'>[EC]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_ED_134'></a><a href='#FNanchor_ED_134'>[ED]</a><div class='note'><p> U.S. Con. Rept., no. 349, Oct., 1909.</p></div>
+
+<a name='Footnote_EE_135'></a><a href='#FNanchor_EE_135'>[EE]</a><div class='note'><p> Lloyd's Register, 1910-11.</p></div>
+
+<a name='Footnote_EF_136'></a><a href='#FNanchor_EF_136'>[EF]</a><div class='note'><p> Daily Con. Repts., no. 106, May 1, 1911.</p></div>
+
+<a name='Footnote_EG_137'></a><a href='#FNanchor_EG_137'>[EG]</a><div class='note'><p> Meeker. Also Parliamentary papers.</p></div>
+
+<a name='Footnote_EH_138'></a><a href='#FNanchor_EH_138'>[EH]</a><div class='note'><p> Lloyd's Register, 1910-11.</p></div>
+
+
+
+<hr style='width: 65%;' />
+<a name='CHAPTER_IX'></a><h2><a name='Page_57'></a>CHAPTER IX</h2>
+
+<p style='text-align: center;'>DENMARK&mdash;NORWAY&mdash;SWEDEN</p>
+<br />
+
+<p>Denmark pays postal subventions to two steamship companies for carrying
+the mails to Sweden and to Iceland, and &quot;trade&quot; subsidies to other
+companies to encourage particularly the export trade. The latter are
+payments directly for reductions in freight rates, which are supervised
+by the Government.<a name='FNanchor_EI_139'></a><a href='#Footnote_EI_139'><sup>[EI]</sup></a> The postal subventions are not large, and they
+are generally accepted as only fair remuneration for service
+rendered.<a name='FNanchor_EJ_140'></a><a href='#Footnote_EJ_140'><sup>[EJ]</sup></a></p>
+
+<hr style='width: 45%;' />
+
+<p>Norway and Sweden both give subsidies for mail carriage solely, and
+grant no direct bounties on shipping. Both, however, undertake the
+furtherance of commerce and navigation through &quot;State contributions,&quot; in
+the form of loans to shipowners from Government funds.<a name='FNanchor_EK_141'></a><a href='#Footnote_EK_141'><sup>[EK]</sup></a> Such aid has
+been granted to several steamship lines. In 1910 the Swedish Government
+granted a loan equivalent to half a million dollars American money
+toward the capital of a new line between Swedish ports and New York,
+Philadelphia, and Baltimore.<a name='FNanchor_EL_142'></a><a href='#Footnote_EL_142'><sup>[EL]</sup></a> Shipping is exempt from taxation in
+both countries.<a href='#Footnote_EM_143'><sup>[EM]</sup></a> The Swedish tonnage in 1910 stood at a total of 1472
+vessels of 918,079 tons.<a name='FNanchor_EN_144'></a><a href='#Footnote_EN_144'><sup>[EN]</sup></a></p>
+
+<hr style='width: 45%;' />
+
+<p>In Norway the laws put no restriction upon shipowners as to purchase in
+any market. Most of her steam tonnage is foreign-bought, and largely
+second-hand. Her merchant fleet, however, consists for the greater part,
+of wooden sailing-ships, and these are mostly of domestic build.<a name='FNanchor_EM_143'></a><a href='#Footnote_EM_143'><sup>[EM]</sup></a>
+Besides the mail subsidies the Government grant &quot;trade&quot; <a name='Page_58'></a>subsidies to
+some forty Norwegian steamship companies to enable them to maintain
+routes to various foreign ports. These subsidies amount to about half a
+million dollars annually.<a name='FNanchor_EO_145'></a><a href='#Footnote_EO_145'><sup>[EO]</sup></a> In 1910 Norway stood in tonnage fourth
+among European maritime countries: her total tonnage being 2,014,533
+tons.<a name='FNanchor_EP_146'></a><a href='#Footnote_EP_146'><sup>[EP]</sup></a> Norway has by far the largest percentage of sea-faring
+population, and her mariners are found in the crews of all nations in
+Europe and America.</p>
+
+<p>FOOTNOTES:</p>
+
+<a name='Footnote_EI_139'></a><a href='#FNanchor_EI_139'>[EI]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_EJ_140'></a><a href='#FNanchor_EJ_140'>[EJ]</a><div class='note'><p> Parl. papers.</p></div>
+
+<a name='Footnote_EK_141'></a><a href='#FNanchor_EK_141'>[EK]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_EL_142'></a><a href='#FNanchor_EL_142'>[EL]</a><div class='note'><p> U.S. Con. Rept., no. 82, 1910, p. 106.</p></div>
+
+<a name='Footnote_EM_143'></a><a href='#FNanchor_EM_143'>[EM]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_EN_144'></a><a href='#FNanchor_EN_144'>[EN]</a><div class='note'><p> Lloyd's Register, 1910-11.</p></div>
+
+<a name='Footnote_EO_145'></a><a href='#FNanchor_EO_145'>[EO]</a><div class='note'><p> Report of (U.S.) commissioner of navigation for 1909.</p></div>
+
+<a name='Footnote_EP_146'></a><a href='#FNanchor_EP_146'>[EP]</a><div class='note'><p> Lloyd's Register, 1910-11.</p></div>
+
+
+
+<hr style='width: 65%;' />
+<a name='CHAPTER_X'></a><h2><a name='Page_59'></a>CHAPTER X</h2>
+
+<p style='text-align: center;'>RUSSIA</p>
+<br />
+
+<p>In Russia steamship lines were early subsidized with mileage bounties,
+besides receiving postal subventions; and later the Government adopted
+the policy of returning the Suez Canal tolls to the subsidized lines.
+The mileage subsidies are direct bounties avowedly for the encouragement
+of Russian navigation, and are very large.<a href='#Footnote_EQ_147'><sup>[EQ]</sup></a></p>
+
+<p>In 1898 a Government commission, appointed to consider and report upon
+the state of the empire's mercantile marine, declared that Russia was
+losing a vast sum annually through the lack of a sufficient commercial
+fleet of her own, and yet no progress seemed to be making toward
+increasing her tonnage. To remedy this unsatisfactory condition the
+commission suggested the removal of the duty on ships built abroad for
+Russia, and the free admission of all material necessary for ship
+construction.<a name='FNanchor_ER_148'></a><a href='#Footnote_ER_148'><sup>[ER]</sup></a></p>
+
+<p>Favoring laws followed. By a measure of July that year (1898) ships
+bought abroad, if destined for the foreign sea-borne trade, were
+exempted for a period of ten years from the heavy duties levied on such
+vessels. The next year (1899) the coasting trade, reserved
+exclusively for Russian ships, was extended to include navigation
+between any two Russian ports in any seas; and, further to restrict this
+trade to subjects of the empire, it was enacted that ships engaged in it
+must be manned exclusively by Russian officers and seamen.<a name='FNanchor_EQ_147'></a><a href='#Footnote_EQ_147'><sup>[EQ]</sup></a></p>
+
+<p>At this period Russia's shipping industry, outside the Government works
+for the construction of battle-ships, was of comparatively little
+consequence. In the few extensive ship-yards river steamers, tugs, and
+other small craft, built from Russian materials and by Russian workmen,
+were <a name='Page_60'></a>chiefly turned out. The materials could be bought cheaper abroad,
+but Russian labor was cheaper. According to the United States consul at
+St. Petersburg, the wages of common workmen were then from fifty-one to
+sixty-four cents a day, while skilled workmen were receiving but
+seventy-seven cents to one dollar a day.<a name='FNanchor_ES_149'></a><a href='#Footnote_ES_149'><sup>[ES]</sup></a></p>
+
+<p>In the decade 1890-1901 the amount of subsidies expended directly to
+encourage shipping increased rapidly, and the tonnage increased in
+extent and importance. In 1890-91 the total tonnage stood at 427,335
+tons of which 156,070 were steam and 271,265 sailing ships. In 1902-03 a
+total of 800,334 tons was reached, of which 556,102 were steam and
+244,232 sailing ships.<a name='FNanchor_ET_150'></a><a href='#Footnote_ET_150'><sup>[ET]</sup></a></p>
+
+<p>In 1902 the granting of bounties in the form of loans to ship-owners was
+proposed, with the object of inducing them to buy Russian ships built of
+Russian materials instead of foreign product. The scheme contemplated a
+mortgage on the finished ship at fifty per cent of the actual cost,
+without interest, to cover a period of twenty years, the loans to be in
+equal yearly payments. The amount of the bounty was to depend upon the
+difference between the cost of home-built and foreign-built ships. The
+loans were to be made only on first-class sea-going steamers. The plans
+and specifications were to be approved by the minister of finance before
+building; and steamers of over one thousand tons register must show an
+average speed of not less than ten knots on a six hours' trial; those
+under one thousand tons, of not less than eight knots. In addition to
+the loans the Government was to bear part of the expense of insurance.
+To facilitate the export of Russian goods in Russian-built ships, a
+rebate was allowed of half the expense of Russian coal used in steamers
+carrying less than three-fourths of a full cargo on export, and one-half
+cargo on import. It was estimated that this scheme for fostering
+domestic shipbuilding would entail smaller drafts on the national
+treasury <a name='Page_61'></a>than would the granting of direct construction and navigation
+premiums.<a name='FNanchor_EU_151'></a><a href='#Footnote_EU_151'><sup>[EU]</sup></a></p>
+
+<p>Progress was checked appreciably by the war with Japan (1904-05). But
+the year after, the empire was active again in advancing her interests
+in the East, by systematically granting subsidies to steamship lines to
+various Asiatic points.<a name='FNanchor_EV_152'></a><a href='#Footnote_EV_152'><sup>[EV]</sup></a> By 1909 the tonnage had been brought to a
+total of 700,959 tons, approaching that of the year before the war. Of
+this total 443,243 was steam tonnage. The greater part of the steam
+fleet was foreign built, only 167 of the total, 898 steamers, being of
+Russian product. The largest number were built in England (341). Others
+were obtained from various European yards. More than ninety per cent
+were of iron and steel. Of the sailing-ships, ninety per cent were home
+product.<a name='FNanchor_EW_153'></a><a href='#Footnote_EW_153'><sup>[EW]</sup></a> In 1910 the total tonnage stood at 887,325 tons.<a name='FNanchor_EX_154'></a><a href='#Footnote_EX_154'><sup>[EX]</sup></a></p>
+
+<p>The mileage subsidies in 1910 were going principally to eleven steamship
+companies; the postal subventions mainly to four. Those receiving the
+mileage subsidies carry the mails and Government passengers free. The
+largest mileage subsidy goes to the Black Sea Navigation Company, the
+oldest and most important of the subsidized lines (founded in 1856, with
+Government aid).<a name='FNanchor_EY_155'></a><a href='#Footnote_EY_155'><sup>[EY]</sup></a> In addition to the subsidy the Government pays back
+the Suez Canal tolls. The Russian Volunteer Fleet stands second on the
+list of subsidy receivers. This is practically a Government affair. It
+was created in the war-time of 1877-78, by private subscription, as an
+auxiliary war fleet; and was reorganized for general service in 1892.
+The members of the board of managers are State nominees, and the
+officers and crews are regarded as employees of the crown.<a name='FNanchor_EZ_156'></a><a href='#Footnote_EZ_156'><sup>[EZ]</sup></a> The
+subsidy is fixed at six hundred thousand rubles ($309,999) a year; and
+the re<a name='Page_62'></a>funded Suez Canal tolls amount to another six hundred thousand
+rubles.<a name='FNanchor_FA_157'></a><a href='#Footnote_FA_157'><sup>[FA]</sup></a></p>
+
+<p>The mileage subsidies, given directly to foster shipping, increased
+rapidly from year to year after 1890, while the postal subventions, for
+mail carriage chiefly, remained practically constant.<a name='FNanchor_FB_158'></a><a href='#Footnote_FB_158'><sup>[FB]</sup></a></p>
+
+<p>FOOTNOTES:</p>
+
+<a name='Footnote_EQ_147'></a><a href='#FNanchor_EQ_147'>[EQ]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_ER_148'></a><a href='#FNanchor_ER_148'>[ER]</a><div class='note'><p> U.S. Consul Smith, Moscow, in Con. Rept., no. 216, p. 149,
+Sept., 1898.</p></div>
+
+<a name='Footnote_ES_149'></a><a href='#FNanchor_ES_149'>[ES]</a><div class='note'><p> U.S. Con. Gen. R.T. Greener, St. Petersburg, in U.S. Con.
+Rept., no. 236, p. 91, May, 1900.</p></div>
+
+<a name='Footnote_ET_150'></a><a href='#FNanchor_ET_150'>[ET]</a><div class='note'><p> Report of The Merchant Marine Commission (U.S.), 1905,
+vol. II, p. 947.</p></div>
+
+<a name='Footnote_EU_151'></a><a href='#FNanchor_EU_151'>[EU]</a><div class='note'><p> U.S. Commercial Agent R.T. Greener, Vladivostock, in U.S.
+Con. Repts., no. 265, p. 218, October, 1902.</p></div>
+
+<a name='Footnote_EV_152'></a><a href='#FNanchor_EV_152'>[EV]</a><div class='note'><p> Same, no. 313, p. 140, October, 1906.</p></div>
+
+<a name='Footnote_EW_153'></a><a href='#FNanchor_EW_153'>[EW]</a><div class='note'><p> Con. Gen. John H. Snodgrass, Moscow, in U.S. Con. Repts.,
+no. 354, pp. 32-33, March, 1910.</p></div>
+
+<a name='Footnote_EX_154'></a><a href='#FNanchor_EX_154'>[EX]</a><div class='note'><p> Lloyd's Register, 1910-11.</p></div>
+
+<a name='Footnote_EY_155'></a><a href='#FNanchor_EY_155'>[EY]</a><div class='note'><p> Con. Gen. Snodgrass, Con. Repts., no. 102, Oct., 1910.</p></div>
+
+<a name='Footnote_EZ_156'></a><a href='#FNanchor_EZ_156'>[EZ]</a><div class='note'><p> Parl. papers: Report of com. of enquiry into Steamship
+Subsidies, 1901.</p></div>
+
+<a name='Footnote_FA_157'></a><a href='#FNanchor_FA_157'>[FA]</a><div class='note'><p> List given in Rept. of Mer. Marine Com., with totals paid
+in 1902-03, vol. 2, p. 946.</p></div>
+
+<a name='Footnote_FB_158'></a><a href='#FNanchor_FB_158'>[FB]</a><div class='note'><p> Mecker.</p></div>
+
+
+
+<hr style='width: 65%;' />
+<a name='CHAPTER_XI'></a><h2><a name='Page_63'></a>CHAPTER XI</h2>
+
+<p style='text-align: center;'>JAPAN&mdash;CHINA</p>
+<br />
+
+<p>While France is the bounty-giving nation <i>par excellence</i>, Japan is a
+pressing second. The development of a modern merchant marine, together
+with a modern navy, was among the first undertakings of the awakening
+empire upon her assumption of Occidental civilization. Adopting what
+seemed to her statesmen of the new regime, from their study of Western
+methods, to be the speediest way to that end, she started out
+energetically to attain it through lavish money-grants from the national
+treasury for the establishment of steamship companies of her own people
+in coastwise and ocean service, and of modernized ship-yards and
+shipbuilders.</p>
+
+<p>The initial venture resulted in the creation of a steamship monopoly.
+This was the subsidizing, in 1877, of the pioneer concern, to supply
+steam communication between various domestic ports, and also with
+Siberia, China, and Corea. It was founded by a broad-visioned Japanese
+merchant, Jwasaki Yataro,<a href='#Footnote_FC_159'><sup>[FC]</sup></a> and controlled by him. To break his
+monopoly the Government in 1882 set up a rival State-supported
+company.<a href='#Footnote_FC_159'><sup>[FC]</sup></a> After a period of &quot;desperate competition&quot; and warfare,
+Jwasaki persuaded the new concern to unite with his. So was effected a
+community of interests after the most approved Western pattern.<a name='FNanchor_FC_159'></a><a href='#Footnote_FC_159'><sup>[FC]</sup></a> By
+this union was formed, in 1885, the powerful <i>Nippon Yusen Kaisha</i>
+(Japan Mail Steamship Company), which remained the most powerful of
+Japanese steamship establishments, with lines running to the same ports
+to which the American steamers run.</p>
+
+<p>Coincident with the State-aiding of steamship companies was the granting
+of liberal postal subvention. Next followed the institution of a general
+subsidy system, frankly designed <a name='Page_64'></a>to stimulate domestic shipbuilding and
+to further navigation by Japanese ships.</p>
+
+<p>This system was embodied in two acts promulgated in 1896, the year after
+the finish of the Japan-China War (1894-95), when the merchant marine
+was growing pretty rapidly, but not rapidly enough for the aspiring
+nation. These were, a Shipbuilding Encouragement Law, the aim of which
+was to stimulate the building of vessels above 700 tons; and a
+Navigation Encouragement Law, to foster open-sea navigation. Their model
+was the French system.</p>
+
+<p>These laws offered construction and navigation subsidies, and also made
+provision for a widely extended postal service with increased postal
+subventions. The construction bounties were available for &quot;any company
+composed of Japanese subjects exclusively as members and shareholders
+which shall establish a ship-yard conforming to the requirements of the
+Minister of State for Communications, and shall build ships.&quot; The rates
+were fixed as follows: for ships of over 1000 tons, twenty yen ($9.96)
+per gross ton; of over 700 and under 1000 tons, twelve yen; for engines
+built with ships, or in any other domestic dock-yard, with the consent
+of the Minister of Communications, five yen per horsepower. Japanese
+materials only were to be used, unless the Minister of Communications
+should give permission to use foreign materials. The navigation bounties
+were granted only for iron and steel ships owned exclusively by Japanese
+subjects, and plying between Japan and foreign ports. The rates in this
+class were: twenty-five sen (about 12-1/2 cents) per gross ton per
+thousand miles run for ships of 1000 tons steaming at ten knots an hour;
+ten per cent added for every additional 500 tons up to 6000 tons, and
+twenty per cent for every additional knot up to seventeen. Foreign-built
+ships less than five years old, owned by Japanese, were admitted to
+these bounties. The postal routes established were fifteen in number,
+calling for an annual expenditure of 4,964,404 yen (about $2,482,202)
+when in full operation. The payments for postal service were to be
+computed at the mileage rate given for navigation. Previous to this act
+the postal subventions had amounted <a name='Page_65'></a>annually to nine hundred and
+forty-five thousand yen in 1890 and 1891, and nine hundred and thirty
+thousand yen in the subsequent years.<a href='#Footnote_FD_160'><sup>[FD]</sup></a></p>
+
+<p>The effect of these laws was to stimulate overproduction. The <i>Nippon
+Yusen Kaisha</i> ordered eighteen large freight steamers aggregating 88,000
+tons. Other companies doubled and trebled their fleets.<a href='#Footnote_FD_160'><sup>[FD]</sup></a> One result
+of the overproduction was the forcing down of freights. This, together
+with the business depression of 1898-99, brought losses to the shipping
+companies despite the large subsidies. The rapidly increasing amounts of
+the subsidies, too, were giving the Government concern. From a total of
+1,027,275 yen in 1896 the sum expended annually had grown by 1899 to
+5,846,956 yen. The total paid between 1896 and 1899 had amounted to
+13,133,440 yen, about $6,566,720.<a href='#Footnote_FD_160'><sup>[FD]</sup></a></p>
+
+<p>Accordingly, in 1899 (March), a law was enacted modifying the system.
+The navigation bounties on foreign-built ships were reduced by half,
+while the subventions to the postal lines were fixed at certain yearly
+sums. A law of 1900 (February 23) extended the postal services. Under
+these laws the postal subventions reached a total of about 5,647,811 yen
+($2,823,905) a year. Of this total the <i>Nippon Yusen Kaisha's</i> was the
+lion's share,&mdash;4,299,861 yen, about $2,149,930.<a name='FNanchor_FD_160'></a><a href='#Footnote_FD_160'><sup>[FD]</sup></a></p>
+
+<p>After the passage of these laws the various companies further increased
+their tonnage, but the merchant marine grew more wholesomely for a
+while. In 1902 the total tonnage had reached 934,000 tons, and the
+Japanese mercantile fleet had risen to the position of eighth in the
+world in point of tonnage, whereas in 1892 it was only thirteenth.<a name='FNanchor_FE_161'></a><a href='#Footnote_FE_161'><sup>[FE]</sup></a>
+In 1907 the United States consul at Yokohama wrote: &quot;The building of
+ships of over ten thousand tons in Japanese yards is now quite
+common.... The war [with Russia] has given a great impetus to the
+shipbuilding and dock-yard industry which has made remarkable progress
+during the last few years.&quot;<a name='FNanchor_FF_162'></a><a href='#Footnote_FF_162'><sup>[FF]</sup></a></p>
+
+<p>That year (1907) the Government brought forward <a name='Page_66'></a>several ship-subsidy
+bills making provision for further Japan sea services.<a name='FNanchor_FG_163'></a><a href='#Footnote_FG_163'><sup>[FG]</sup></a> In 1908 the
+amount of State aid to the merchant marine had increased to an
+equivalent of $6,170,566 and additional amounts were asked for, one for
+the line to South America.<a href='#Footnote_FH_164'><sup>[FH]</sup></a> The budget for 1908-09 carried the
+largest amounts yet devoted by Japan to ship subsidizing. At the end of
+1908 official statistics placed the number of steamers at 1618, with a
+gross tonnage of 1,153,340.42. Of these, one hundred and one were
+steamers of more than three thousand tons.<a name='FNanchor_FH_164'></a><a href='#Footnote_FH_164'><sup>[FH]</sup></a></p>
+
+<p>In 1909 a new subsidy system was adopted (the laws of 1896 revised), to
+go into effect January 1 1910. The fixed navigation bounties granted by
+the old system on specified routes were abolished, and a general subsidy
+offered open to all steamships conforming to the provisions of the new
+law. The subsidized open-sea routes, however, were limited to four&mdash;the
+European, the North American, South American, and Australian;<a name='FNanchor_FI_165'></a><a href='#Footnote_FI_165'><sup>[FI]</sup></a> and
+coasting services in the Far East were not affected. Among other
+conditions imposed on the beneficiaries were the requirements that
+steamers must carry more than one-half their maximum load; that each
+must have a wireless telegraph outfit, this, however, instituted at the
+Government's expense; that the Department of Communications be furnished
+with information as to freights and passenger rates; and that proper
+terminal facilities, as piers, warehouses, lighters, be provided by the
+subsidized companies.<a name='FNanchor_FJ_166'></a><a href='#Footnote_FJ_166'><sup>[FJ]</sup></a> The steamers receiving the full subsidy must
+be home-built, of steel, of over 3000 tons gross, and showing a speed of
+at least twelve knots per hour. The rate was fixed at fifty sen per
+gross ton for every thousand nautical miles, and ten per cent of this
+sum added per additional speed of one nautical mile an hour, according
+to the conditions of the route. Upon a vessel the age of which exceeds
+five years the subsidy <a name='Page_67'></a>decreases five per cent each year till the age
+of fifteen is reached, when it ceases. Foreign-built steamers under five
+years of age, which may be put in service with the sanction of the
+Government authorities, are entitled to half of the subsidy. The
+construction subsidies were arranged in two classes, and each class in
+four grades.<a name='FNanchor_FK_167'></a><a href='#Footnote_FK_167'><sup>[FK]</sup></a> The rates were slightly increased over those of the law
+of 1896, and their benefits were limited to steel vessels of over 1000
+tons instead of 700 tons.</p>
+
+<p>The total appropriations for ship subsidies in the budget for 1911-12
+amounted, in American money, to $6,845,995, of which $6,294,020 were for
+navigation, and $551,975 for construction subsidies: an increase of
+$478,387 in the former class over the appropriation of the previous
+year, and a decrease in the latter class of $6,835.<a name='FNanchor_FL_168'></a><a href='#Footnote_FL_168'><sup>[FL]</sup></a></p>
+
+<p>The total Japanese tonnage in 1910 stood at 1,149,200 tons.<a name='FNanchor_FM_169'></a><a href='#Footnote_FM_169'><sup>[FM]</sup></a> The
+<i>Nippon Yusen Kaisha</i> practically owns nine-tenths of the ocean-going
+steamships flying the Japanese flag.<a name='FNanchor_FN_170'></a><a href='#Footnote_FN_170'><sup>[FN]</sup></a></p>
+
+<hr style='width: 45%;' />
+
+<p>China, too, taking on Western ways, is emulating Japan in establishing a
+modern merchant marine. The Government is giving State aid to native
+steamship companies, and subsidizing ship-yards. According to the United
+States consul-general at Hongkong the Government is now (1911) to
+furnish half of the amount of an extension of the capital of the Chinese
+Merchants' Steam Navigation Company to twenty million taels (about
+$12,600,000 gold), and thirty additional steamers of modern type are to
+be built for service&mdash;ten on foreign routes, including a route to the
+United States, and twenty on routes between Chinese ports; while a new
+ship-yard is to be set up at Shanghai under Government auspices,
+capitalized at five million taels (about $3,200,000 gold).</p>
+
+<p>FOOTNOTES:</p>
+
+<a name='Footnote_FC_159'></a><a href='#FNanchor_FC_159'>[FC]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_FD_160'></a><a href='#FNanchor_FD_160'>[FD]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_FE_161'></a><a href='#FNanchor_FE_161'>[FE]</a><div class='note'><p> U.S. Con. Rept., no. 282, March, 1904.</p></div>
+
+<a name='Footnote_FF_162'></a><a href='#FNanchor_FF_162'>[FF]</a><div class='note'><p> U.S. Con. Rept., no. 316, Jan, 1907, pp. 92-93.</p></div>
+
+<a name='Footnote_FG_163'></a><a href='#FNanchor_FG_163'>[FG]</a><div class='note'><p> Con. Gen. H.B. Miller, Yokohama, in Con. Repts., no. 32,
+pp. 120-121, May, 1907.</p></div>
+
+<a name='Footnote_FH_164'></a><a href='#FNanchor_FH_164'>[FH]</a><div class='note'><p> Vice Con. Gen. E.G. Babbitt, Yokohama, in Con. Repts., no.
+344, p. 216, May, 1909.</p></div>
+
+<a name='Footnote_FI_165'></a><a href='#FNanchor_FI_165'>[FI]</a><div class='note'><p> Japan Year Book, 1911.</p></div>
+
+<a name='Footnote_FJ_166'></a><a href='#FNanchor_FJ_166'>[FJ]</a><div class='note'><p> U.S. Con. Gen. Thomas Sammons, Yokohama, in Daily Con.
+Repts., no. 38, Aug. 17, 1910.</p></div>
+
+<a name='Footnote_FK_167'></a><a href='#FNanchor_FK_167'>[FK]</a><div class='note'><p> Japan Year Book, 1911.</p></div>
+
+<a name='Footnote_FL_168'></a><a href='#FNanchor_FL_168'>[FL]</a><div class='note'><p> U.S. Ambassador Thomas J. O'Brien, Tokyo, in Daily Con.
+Repts., no. 123, May 26, 1911.</p></div>
+
+<a name='Footnote_FM_169'></a><a href='#FNanchor_FM_169'>[FM]</a><div class='note'><p> Lloyd's Register, 1910-11.</p></div>
+
+<a name='Footnote_FN_170'></a><a href='#FNanchor_FN_170'>[FN]</a><div class='note'><p> Japan Year Book, 1911.</p></div>
+
+
+
+<hr style='width: 65%;' />
+<a name='CHAPTER_XII'></a><h2><a name='Page_68'></a>CHAPTER XII</h2>
+
+<p style='text-align: center;'>SOUTH AMERICA</p>
+<br />
+
+<p>Brazil gives subventions from the Federal treasury to several foreign
+steamship companies, and some of the States of the federation also make
+similar grants from their treasuries. Besides the subventions to lines
+to foreign ports, the Government grants State aid to a considerable
+number of coast lines operating between Rio de Janeiro and other
+Brazilian ports. The total amount of the subventions in 1910 was equal
+to $1,437,880.<a name='FNanchor_FO_171'></a><a href='#Footnote_FO_171'><sup>[FO]</sup></a> The principal beneficiary was the <i>Lloyd Brazileiro</i>,
+maintaining the line between Brazilian ports and the United States.</p>
+
+<hr style='width: 45%;' />
+
+<p>Argentina is adopting a policy of giving subsidies to foreign steamship
+companies which extend her communications with foreign ports. As far
+back as 1865 a decree was issued offering a subsidy of twenty thousand
+dollars a year for a line between Argentina and the United States. But
+it was not taken. In 1911 the Government was prepared to pay a subsidy
+to a new steamship company promoted to furnish a regular service to
+South Africa.<a name='FNanchor_FP_172'></a><a href='#Footnote_FP_172'><sup>[FP]</sup></a> In 1911 there appeared the first steam vessel flying
+the American flag at Buenos Aires in twenty years.<a name='FNanchor_FQ_173'></a><a href='#Footnote_FQ_173'><sup>[FQ]</sup></a></p>
+
+<p>Chile grants mail subsidies, which have no appreciable effect in the
+merchant marine.<a name='FNanchor_FR_174'></a><a href='#Footnote_FR_174'><sup>[FR]</sup></a></p>
+
+<p>FOOTNOTES:</p>
+
+<a name='Footnote_FO_171'></a><a href='#FNanchor_FO_171'>[FO]</a><div class='note'><p> Con. Gen. George E. Anderson, Rio de Janeiro, in Daily
+Con. Repts., no. 55, p. 719, Sept. 7, 1910.</p></div>
+
+<a name='Footnote_FP_172'></a><a href='#FNanchor_FP_172'>[FP]</a><div class='note'><p> Daily Con. Repts., March 18, 1911.</p></div>
+
+<a name='Footnote_FQ_173'></a><a href='#FNanchor_FQ_173'>[FQ]</a><div class='note'><p> Same, January 20, 1911.</p></div>
+
+<a name='Footnote_FR_174'></a><a href='#FNanchor_FR_174'>[FR]</a><div class='note'><p> Meeker.</p></div>
+
+
+
+<hr style='width: 65%;' />
+<a name='CHAPTER_XIII'></a><h2><a name='Page_69'></a>CHAPTER XIII</h2>
+
+<p style='text-align: center;'>THE UNITED STATES</p>
+<br />
+
+<p>While a navigation code founded in 1790 and 1792, and developed in 1816,
+1817, and 1820, after the model of the then existing English code,<a name='FNanchor_FS_175'></a><a href='#Footnote_FS_175'><sup>[FS]</sup></a>
+has been retained in modified form through enactments in subsequent
+years, a system of general ship-subsidies, though repeatedly proposed,
+has never been adopted by the United States. From 1793 to 1866 bounties
+were given to fishing vessels and men employed in the bank and other
+deep-sea fisheries,<a name='FNanchor_FT_176'></a><a href='#Footnote_FT_176'><sup>[FT]</sup></a> but no subsidies to the merchant marine were
+granted till 1845, and these were only postal subsidies&mdash;payments in
+excess of an equivalent for services to be rendered in ocean
+mail-carriage. The law enacted that year had for its declared purpose
+the encouragement of American ocean steamship-building and running. With
+this act, therefore, the real history of Government aid to domestic
+shipping in this country begins.</p>
+
+<p>At the time of the adoption of this policy America was still leading the
+world in ocean sailing-ships with her splendid fleets of fast-sailing
+packets and &quot;clippers&quot;, while England had taken the lead in steamships.
+The law of 1845 was the culmination of a move begun in Congress in 1841,
+the year after the first Cunarder had crossed from Liverpool to Halifax
+and Boston. Its aim was to parry England's bold stroke for maritime
+supremacy with her State-aided steamship lines, and directly to &quot;protect
+our merchant shipping from this new and strange menace.&quot;<a href='#Footnote_FU_177'><sup>[FU]</sup></a> The first
+move of 1841 was for an appropriation of a million dollars annually for
+foreign-mails carriage in American-owned ships.<a name='FNanchor_FU_177'></a><a href='#Footnote_FU_177'><sup>[FU]</sup></a></p>
+
+<p><a name='Page_70'></a>The law of 1845 (March 3) authorized the postmaster-general to contract
+with American ship-owners exclusively for this service to be performed
+in American vessels, steamships preferred, and by American citizens, for
+a period of from four to ten years, with the proviso that Congress by
+joint resolve might at any time terminate a contract. The subsidy was
+embodied in the rates of postage thus fixed: upon all letters and
+packets not exceeding a half-ounce in weight, between any ports of the
+United States and any foreign ports not less than three thousand miles
+distant, twenty-four cents, with the inland postage added; upon letters
+and packets over one half-ounce in weight, and not exceeding one ounce,
+forty-eight cents, and for every additional half-ounce or fraction of an
+ounce, fifteen cents; to any of the West India Islands, or islands in
+the Gulf of Mexico, ten cents, twenty cents, and five cents,
+respectively; upon each newspaper, pamphlet, and price-current to any of
+the ports and places above enumerated, three cents: inland postage to be
+added in all cases. The postmaster-general was to give the preference to
+such bidder as should propose to carry the mails in a steamship rather
+than a sailing-ship. Contractors were to turn their ships over to the
+Government upon demand for conversion into ships of war, the Government
+to pay therefor the fair full value, as ascertained by appraisers. The
+postmaster-general was further authorized to make ten-years' contracts
+for mail carriage from place to place in the United States in steamboats
+by sea, or on the Gulf of Mexico, or on the Mississippi River up to New
+Orleans, on the same conditions regarding the transfer of the ships to
+the Government when required for use as war ships.<a name='FNanchor_FV_178'></a><a href='#Footnote_FV_178'><sup>[FV]</sup></a></p>
+
+<p>The next year, 1846, in the annual post-office appropriations act (June
+19), provision was made for the application of twenty-five thousand
+dollars toward the establishment of a line of mail steamers between the
+United States and Bremen; and early in 1847 (February 3) a contract was
+duly concluded for a Bremen and Havre service, the first under the law
+of 1845.</p>
+
+<p><a name='Page_71'></a>This was a five years' contract entered into with the Ocean Steam
+Navigation Company, upon the basis of an earlier agreement (February
+1846) with Edward Mills of New York, which Mr. Mills had transferred to
+the new organization. The subsidy was fixed at one hundred thousand
+dollars a year for each ship going by Cowes to Bremen and back to New
+York once in two months a year, and seventy-five thousand dollars a year
+for each ship going by Cowes to Havre and back to New York. The
+contractors were to build within a year's time four first-class
+steamships of not less than 1400 tons, nor less than a thousand
+horsepower; and were to run their line &quot;with greater speed to the
+distance than is performed by the Cunard Line between Boston and
+Liverpool and back.&quot;<a name='FNanchor_FW_179'></a><a href='#Footnote_FW_179'><sup>[FW]</sup></a> Provision for the subsidy thus called for was
+promptly made in this item in the post-office appropriation bill for the
+ensuing year, approved March 2: &quot;for transportation by steam-ships
+between New York and Bremen according to the contract with Edward Mills,
+$258,609.&quot;<a name='FNanchor_FX_180'></a><a href='#Footnote_FX_180'><sup>[FX]</sup></a></p>
+
+<p>The next step was the enactment of a law which had for its declared
+objects &quot;to provide efficient mail services, to encourage navigation and
+commerce, and to build up a powerful fleet in case of war.&quot;<a name='FNanchor_FY_181'></a><a href='#Footnote_FY_181'><sup>[FY]</sup></a> This
+measure, approved March 3, 1847, entitled &quot;An act to provide for the
+building and equipment of four naval steamships,&quot; made provision for the
+construction, with Government aid, of merchant mail-steamships under the
+supervision of the Navy Department that they might be rendered suitable
+if needed for war service.</p>
+
+<p>The act directed the secretary of the navy to accept on the part of the
+Government certain proposals that had been made for the carriage of the
+United States mails to foreign ports in American-built and
+American-owned steamships. These proposals had been submitted to the
+postmaster-general (March 6, 1846) by Edward K. Collins and associates
+(James Brown and Stewart Brown) of New York, and A.G. Sloo of
+Cincinnati: one for mail transportation <a name='Page_72'></a>by steamship between New York
+and Liverpool, semimonthly, the other between New York and New Orleans,
+Havana, and Chagres, twice a month. The secretary was directed to
+contract with Messrs. Collins and Sloo in accordance with the provisions
+laid down in this act. These required that the steamers be built under
+the inspection of naval constructors and be acceptable to the Navy
+Department; that each ship carry four passed midshipmen of the navy to
+serve as watch-officers, and a mail agent approved by the
+postmaster-general. Mr. Sloo's ships for his West India service were to
+be commanded by officers of the navy not below the grade of lieutenant.
+The secretary was further directed to contract for mail-carriage beyond
+the Isthmus,&mdash;from Panama up the Pacific coast to some point in the
+Territory of Oregon, once a month each way; but this service could be
+performed in either steam or sailing ships, as should be deemed more
+expedient.<a name='FNanchor_FZ_182'></a><a href='#Footnote_FZ_182'><sup>[FZ]</sup></a></p>
+
+<p>All the contracts thus provided for were concluded the same year. Each
+was to run for ten years. The first executed was that with Mr. Sloo. It
+called for five steamships of not less than 1500 tons, and a
+semi-monthly service. The line was to touch at Charleston, if
+practicable, and at Savannah. The ships were to have engines by direct
+action; and each ship was to be sheathed with copper. The subsidy was
+fixed at two hundred and ninety thousand dollars a year, a rate of
+$1.83-1/2 per mile, the distance to be sailed out and back being 158,000
+miles.<a name='FNanchor_GA_183'></a><a href='#Footnote_GA_183'><sup>[GA]</sup></a> Mr. Sloo immediately set over his contract to George Law,
+Marshall O. Roberts, and Bowes McIlvaine, of New York.<a name='FNanchor_GB_184'></a><a href='#Footnote_GB_184'><sup>[GB]</sup></a> The second
+contract was for the Pacific service, connecting with the mail by the
+Sloo line across the Isthmus. This was made with Arnold Harris of
+Arkansas. It provided for a monthly service between Panama and Astoria,
+Oregon, calling at San Diego, Monterey, and San Francisco, with a
+subsidy of one hundred and ninety-nine thousand dollars per annum. Three
+steamers were to be furnished, two of not less than a thousand tons
+each. Upon receiving the contract Mr. <a name='Page_73'></a>Harris immediately transferred it
+to W.H. Aspinwall of New York, representing the newly formed Pacific
+Mail Steamship Company.<a name='FNanchor_GC_185'></a><a href='#Footnote_GC_185'><sup>[GC]</sup></a> The third was the Collins contract. This
+stipulated for a semi-monthly service between New York and Liverpool
+during the eight open months of the year, and a monthly service through
+the four winter months, with five steamers, each of not less than 2000
+tons and engines of a thousand horsepower. The first ship was to be
+ready for service in eighteen months after the date of the contract,
+November 1, 1847. The subsidy was fixed at $19,250 per twenty round
+trips, or three hundred and eighty-five thousand dollars a year, a rate
+of $3.11 a mile for sailing about 124,000 miles.<a name='FNanchor_GD_186'></a><a href='#Footnote_GD_186'><sup>[GD]</sup></a></p>
+
+<p>By subsequent acts the secretary of the navy was authorized to advance
+twenty-five thousand dollars a month on each of the ships called for by
+these several contracts from the time of their launching to their
+finish; and the date of the completion of the first Collins steamer and
+the opening of the New York and Liverpool service was extended to June
+1, 1850.<a name='FNanchor_GE_187'></a><a href='#Footnote_GE_187'><sup>[GE]</sup></a></p>
+
+<p>At the same time that the secretary of the navy was executing these
+contracts the postmaster-general under the authority of an act &quot;to
+establish certain Post Routes and for other purposes,&quot; also approved
+March 3, 1847,<a name='FNanchor_GF_188'></a><a href='#Footnote_GF_188'><sup>[GF]</sup></a> was contracting for a steamship mail-service between
+Charleston and Havana, with a subsidy of forty-five thousand dollars per
+annum. This contract was entered into with M.C. Mordecai of Charleston,
+who agreed to furnish steamships suitable for war purposes, and to
+perform a monthly service.<a name='FNanchor_GG_189'></a><a href='#Footnote_GG_189'><sup>[GG]</sup></a> Several other propositions for steamship
+service to various foreign countries were made to the postmaster-general
+at this time, but none was accepted.<a name='FNanchor_GH_190'></a><a href='#Footnote_GH_190'><sup>[GH]</sup></a></p>
+
+<p>The pioneer Bremen-Havre line began its service on the first day of June
+1847, with two steamers. These were the <a name='Page_74'></a><i>Washington</i> and the <i>Hermann</i>,
+built in New York, strong and large, of 1640 tons and 1734 tons,
+respectively, side-wheelers, bark-rigged. At first they made the run to
+Bremen in from twelve to seventeen days, much better time than the
+average clipper.<a name='FNanchor_GI_191'></a><a href='#Footnote_GI_191'><sup>[GI]</sup></a> But up to 1851 they had no regular schedule of
+sailings, and, their speed being unsatisfactory, few mails were sent by
+them. The subsidy payments, therefore, were made for each voyage
+separately.<a href='#Footnote_GJ_192'><sup>[GJ]</sup></a> They had also ceased to command the patronage of
+travellers. Nevertheless, as a committee of the Senate in 1850 reported,
+they were believed to have been &quot;profitable to their owners as freight
+vessels, and of essential service in promoting the interests of American
+commerce.&quot;<a name='FNanchor_GK_193'></a><a href='#Footnote_GK_193'><sup>[GK]</sup></a> The full service, with twelve trips to Bremen and twelve
+to Havre, was finally begun in 1851, when two more, and larger
+ships,&mdash;the <i>Franklin</i> and the <i>Humboldt</i>, each of 2184 tons, were added
+to the Havre line. Four years before, the original company, because of
+financial difficulties, had organized a separate corporation for the
+Havre service. In 1852 Congress extended the contract to 1857;<a name='FNanchor_GJ_192'></a><a href='#Footnote_GJ_192'><sup>[GJ]</sup></a> and
+Southampton was made the point of shifting the mails.</p>
+
+<p>The New York and Chagres, the Charleston and Havana, and the Pacific
+line, were all under way before the close of 1848. The Pacific line was
+the first in operation. The service began with the three steamers called
+for by the contract, the first sailing from New York on the sixth of
+October, the other two early in December. They were the <i>California</i>,
+1050 tons, the <i>Panama</i>, 1087 tons, the <i>Oregon</i>, 1099 tons, all built
+in New York. The New York and Chagres line was started also in December
+with the sailing of the <i>Falcon</i>, 1000 tons, a purchased steamer which
+the Navy Department accepted temporarily, while the new ships were
+building, that the service might be immediately begun. The opening of
+the new territory south of Oregon acquired through the Mexican War, and
+the beginning of the rush of the &quot;Argonauts&quot; to the newly discovered
+gold <a name='Page_75'></a>fields of California, had made all concerned anxious to get these
+connecting steamship lines a-going.</p>
+
+<p>At first the service was halting because of unavoidable circumstances.
+The Pacific Company were unable at once to meet the demands. Sufficient
+or competent crews could not be obtained on the California coast during
+the gold excitement,<a name='FNanchor_GL_194'></a><a href='#Footnote_GL_194'><sup>[GL]</sup></a> at fever heat in 1849. But it was not long
+before more ships were put on, and the service improved and prospered.
+By September, 1849, the Chagres company had their first completed ship
+in commission. This was the <i>Ohio</i>, 2432 tons, built in New York. By
+June, 1850, the second, the <i>Georgia</i> (and the third of the line, for
+the <i>Falcon</i> was retained) was running. Soon afterwards the <i>Illinois</i>
+was added. At about the same time the Pacific company had added two more
+to their fleet&mdash;the <i>Columbia</i> and the <i>Tennessee</i>. In 1851 the
+postmaster-general was authorized to increase the Pacific trips to
+semi-monthly; and the subsidy was increased. An additional contract
+(March 13) was then made with Mr. Aspinwall, as president of the Pacific
+Mail.<a name='FNanchor_GM_195'></a><a href='#Footnote_GM_195'><sup>[GM]</sup></a> This called for the enlargement of the line within a year, to
+six steamers; and for semi-monthly trips from Panama to Oregon and back,
+with stops and mail delivery at named points in California; and
+increased the company's subsidy by one hundred and forty-nine thousand
+two hundred and fifty dollars per annum. Thus the yearly total became
+three hundred and forty-eight thousand two hundred and fifty dollars.
+Before the semi-monthly trips were begun, San Diego and Monterey were
+dropped for the regular service, to be served by a slower line.<a name='FNanchor_GN_196'></a><a href='#Footnote_GN_196'><sup>[GN]</sup></a> Also
+this year (1851) two more steamers were added to the fleet.</p>
+
+<p>By this time on the Atlantic side the Collins Line was in promising
+operation. The service had auspiciously begun in 1850 with four of the
+five steamships called for by the contract. These were the <i>Atlantic</i>,
+2845 tons, the <i>Arctic</i>, 2856 tons, the <i>Baltic</i>, 2723 tons, and the
+<i>Pacific</i>, 2707 tons, each some seven hundred tons larger than the
+measurement <a name='Page_76'></a>stipulated&mdash;&quot;at least 2000 tons.&quot; All were built in New
+York ship-yards; were especially designed for fast sailing; and in size,
+model, finish, and fittings were pronounced to be &quot;such steamers as the
+world had never seen.&quot;<a name='FNanchor_GO_197'></a><a href='#Footnote_GO_197'><sup>[GO]</sup></a> In all respects they were superior to the
+Cunarders with which they were aggressively to compete; and it was the
+boast of the Americans that they would &quot;beat the English in steam
+navigation, as they had beaten them in fast sailing.&quot; All associated
+with the enterprise were of large experience in maritime affairs. Mr.
+Collins, a native of Truro, Cape Cod, and long a shipping merchant of
+New York, had been at the head of fast clipper-ship lines&mdash;the New
+Orleans and Vera Cruz packet line, and the more famous &quot;Dramatic line&quot;
+(the ships named for plays and players) of transatlantic sailers. The
+commanders of the steamers were all tried clipper captains.</p>
+
+<p>The <i>Atlantic</i> made the initial voyage, steaming gallantly out of New
+York harbor on the twenty-seventh of April, a month before the contract
+time for the beginning of the service. The <i>Pacific</i> followed in June,
+the <i>Baltic</i> in November, the <i>Arctic</i> in December. They beat the
+Cunarders' time on the average by a day. Their popularity was
+immediately established. Their passenger traffic rapidly increased. But
+the severe condition of the mail contract, with their quick sailings
+allowing only short stays in port, made it impossible for the company to
+secure a profitable share of the freight business without a heavy outlay
+for slower cargo boats. Within a few months after the start of the line
+the Cunard Company had cut freight rates from seven pounds ten shillings
+per ton to four pounds. So, while the Collins ships continued steadily
+to outsail the Cunarders and got the bulk of the passenger traffic, the
+Cunarders got most of the freighting. Moreover, the Collins ships were
+far more expensive to run. Indeed, the cost of the rapid service was
+enormous. Mr. Collins stated before a committee of Con<a name='Page_77'></a>gress that to
+save a day or a day and a half in the run between New York and Liverpool
+cost the company nearly a million dollars annually.</p>
+
+<p>Accordingly more subsidy was asked for. This was granted in 1852, the
+act being stimulated by England's move late in 1851 in raising the
+Cunards' subsidy to &pound;173,340 ($843,000), for forty-four trips a year:
+about nineteen thousand dollars per voyage. The extra allowance lifted
+the Collins subsidy to $853,000 for twenty-six trips a year,
+thirty-three thousand dollars per voyage, a rate of upward of five
+dollars a mile.<a name='FNanchor_GP_198'></a><a href='#Footnote_GP_198'><sup>[GP]</sup></a></p>
+
+<p>The competition now became sharper. Still the Collins Line maintained
+its record sailings, and continued to beat the English. Then it was
+sharply checked by a grave disaster. On the twenty-fourth of September,
+1854, the <i>Arctic</i>, when forty miles off Cape Race, rushing through a
+fog, was rammed by a French steamer, and sunk with three hundred and
+seven souls. This calamity had a depressing effect on the company's
+affairs. Two years later, in 1856, Congress determined to reduce the
+subsidy, and notice of the discontinuance of the extra allowance of 1852
+was ordered.<a name='FNanchor_GQ_199'></a><a href='#Footnote_GQ_199'><sup>[GQ]</sup></a> Only a few weeks after this action another disaster,
+even more appalling than the first one, befell the company. On September
+23 the <i>Pacific</i> sailed from Liverpool for her homeward voyage with a
+full complement of passengers; passed to sea out of sight; and was never
+more heard of. She was replaced by the <i>Adriatic</i>, the fifth ship called
+for by the contract, which was launched the year before, the largest,
+finest, swiftest, and most luxurious then afloat; and the company
+struggled on against accumulating odds.</p>
+
+<p>At length, in 1858, Congress abandoned the subsidy system and returned
+to the method of payment for foreign mail-carriage according to the
+actual service rendered, with a proviso, however, favoring American
+ships, such to receive the inland-postage plus the sea postage, while
+foreign ships were to have the sea postage only.<a name='FNanchor_GR_200'></a><a href='#Footnote_GR_200'><sup>[GR]</sup></a></p>
+
+<p><a name='Page_78'></a>This was the final blow. The last voyage of the Collins Line was made
+in January, 1859. Then it perished. In April following, the ships were
+seized by the mortgagees and sold. So closed the career of the pioneer
+United States ship company in the transatlantic service. The splendid
+<i>Adriatic</i> passed to English ownership and the American flag gave way to
+the British. For several years this ship &quot;held the transatlantic record
+with a passage of five days nineteen hours from Galway to St.
+John's.&quot;<a name='FNanchor_GS_201'></a><a href='#Footnote_GS_201'><sup>[GS]</sup></a></p>
+
+<p>Of the other subsidized lines, the ships of the Bremen service were
+withdrawn and laid up after the subsidy ceased. The Havre line continued
+a while longer with two ships that had replaced the <i>Humboldt</i> and the
+<i>Franklin</i>, both of which had been lost,&mdash;the <i>Humboldt</i> wrecked at
+Halifax on December 5, 1853; the <i>Franklin</i> stranded on Montauk Point on
+July 17, 1854. Then with the charter of the two new steamers by the
+Government in 1861 for use in the Civil War, the Havre line also
+disappeared.</p>
+
+<p>The cost to the Government of this first steamship subsidy venture,
+covering the thirteen years between 1845 and 1858, was approximately
+fourteen and a half million dollars.<a name='FNanchor_GT_202'></a><a href='#Footnote_GT_202'><sup>[GT]</sup></a></p>
+
+<p>Meanwhile, within this period, the American wooden sailing-ships
+continued to be the glory of the seas, and the American clippers reached
+their highest development. The appearance of steamships on the North
+Atlantic and the Pacific had inspired the producers of the &quot;wonderful
+American sailing-ships&quot; to greater efforts for their perfection; and the
+clipper, surpassing all other types of sailers in size, sea-qualities,
+and speed, was the result of the intensified rivalry of canvas and
+steam.<a name='FNanchor_GU_203'></a><a href='#Footnote_GU_203'><sup>[GU]</sup></a> The American clipper-ship era fairly opened with the advent
+of the Collins Steamship Line.<a name='FNanchor_GV_204'></a><a href='#Footnote_GV_204'><sup>[GV]</sup></a> Between 1850 and 1855 clipper-ships
+were built for nearly every trade,<a name='FNanchor_GW_205'></a><a href='#Footnote_GW_205'><sup>[GW]</sup></a> and they were on every sea. Some
+<a name='Page_79'></a>of the first were employed in the transatlantic packet service. More
+became engaged particularly in the &quot;booming&quot; trade to California, in the
+long-voyage traffic to China and India.<a name='FNanchor_GX_206'></a><a href='#Footnote_GX_206'><sup>[GX]</sup></a> &quot;When John Bull came
+floating into San Francisco, or Sydney, or Melbourne, he used to find
+Uncle Sam sitting carelessly, with his legs dangling over the wharf,
+smoking his pipe, with his cargo sold and his pockets full of
+money.&quot;<a name='FNanchor_GY_207'></a><a href='#Footnote_GY_207'><sup>[GY]</sup></a> The Crimean War, 1853-56, opened a new and prosperous market
+for American fast sailing-ships, as transports. To meet the demand
+American ship-yards produced in 1855 more tonnage than they had ever
+built before.<a name='FNanchor_GZ_208'></a><a href='#Footnote_GZ_208'><sup>[GZ]</sup></a> The sailing-ship interests strenuously opposed the
+subsidy system. They denounced it as class legislation unjustly favoring
+the few, and urged its abolishment.<a name='FNanchor_HA_209'></a><a href='#Footnote_HA_209'><sup>[HA]</sup></a> How strong this influence was in
+bringing about the change in policy is a mooted question.</p>
+
+<hr style='width: 45%;' />
+
+<p>No further move for fostering the American merchant marine with State
+aid directly or indirectly, was made till 1864. Then the
+steamship-subsidizing policy was revived, first with a proposition for
+the establishment of an American mail-line to Brazil. A subsidy of two
+hundred and fifty thousand dollars per year was proposed, one hundred
+and fifty thousand to be paid by the United States and one hundred
+thousand by the Brazilian Government. Congress endorsed the scheme. The
+act embodying it (May 28)<a name='FNanchor_HB_210'></a><a href='#Footnote_HB_210'><sup>[HB]</sup></a> authorized the postmaster-general to
+contract for a monthly service between the two countries, touching at
+St. Thomas, W.I., by first-class American sea-going steamships of not
+less than 2000 tons. The steamers were to be built under naval
+inspection, and to be subject to taking for war service. Bids were to be
+openly advertised for. The contract was to run for ten years. Thus was
+established the pioneer American line between Philadelphia and Rio de
+Janeiro, which continued from 1865 to 1876, and was then abandoned.</p>
+
+<p><a name='Page_80'></a>In the same session of Congress a bill was introduced, authorizing an
+annual subsidy of five hundred thousand dollars for an ocean
+mail-steamship service to Japan and China via Hawaii. This also received
+favorable consideration, and was passed February 17, 1865. The service
+was to be monthly, performed by American-built ships of not less than
+3000 tons, also constructed under naval inspection. Tenders for the
+contract were to be advertised for, but bids only from United States
+citizens were to be entertained. The contract was to run for ten years.
+Only one bidder appeared (as was evidently expected)&mdash;the Pacific Mail
+Steamship Company. The contract went to that company, and under it, in
+1867, their prosperous Asiatic service began. At the outset they were
+released from the obligation of stopping at Hawaii, and Congress voted
+another subsidy&mdash;seventy five thousand dollars per annum&mdash;for a distinct
+Hawaiian service.<a name='FNanchor_HC_211'></a><a href='#Footnote_HC_211'><sup>[HC]</sup></a> The contract for this service, also advertised
+for, went to the California, Oregon, and Mexican Line.</p>
+
+<hr style='width: 45%;' />
+
+<p>Thus far the granting of postal subsidies for the establishment of
+steamship lines alone had engaged the advocates of State aid to American
+shipping. Now was agitated the institution of a general subsidy system
+as a means of fostering the rehabilitation of the merchant marine of all
+classes in ocean service, sailing-ships as well as steamers. The
+situation had become acute. Through the great loss of tonnage in the
+Civil War, and through the steadily advancing change from wood to iron
+in ship construction and from sail to steam propulsion, the American
+merchant marine had been brought distressingly low. From 1861, when the
+United States was standing second in rank among the nations in the
+extent of her ocean tonnage, to 1866, this tonnage had declined from
+2,642,648 to 1,492,926 tons: a loss of more than forty-three per cent;
+while England, the first in rank and chief competitor, had in the same
+period gained 986,715 tons, or more than forty per cent. Moreover, of
+this increase in English tonnage, a large percentage had been in
+steamers, one ton of which class was estimated <a name='Page_81'></a>to be equal in
+efficiency to three tons of sailing-ships; while, by substituting
+largely iron for wood, England had gained a still further advantage in
+her much larger class of iron vessels, doubly as durable as those of
+wood.<a name='FNanchor_HD_212'></a><a href='#Footnote_HD_212'><sup>[HD]</sup></a></p>
+
+<p>The matter was brought up in Congress by a resolution of the House,
+March 22, 1869, calling for the appointment of a select committee, &quot;to
+inquire into and report at the next session of Congress the causes of
+the great reduction of American tonnage engaged in the foreign carrying
+trade, and the great depression of the navigation interests of the
+country; and also to report what measures are necessary to increase our
+ocean tonnage, revive our navigation interests, and regain for our
+country the position it once had among the nations as a great maritime
+power.&quot; Of this committee Representative John Lynch of Maine was made
+chairman.</p>
+
+<p>The committee gave a series of hearings mainly in Atlantic seaboard
+cities, and submitted their report on February 17, 1870, accompanied by
+two bills recommended for passage; the one, a bounty bill, the other,
+relative to tonnage duties. With these measures the history of years of
+effort to establish the principle of general ship-subsidies in the
+American economic system properly begins.</p>
+
+<p>The Lynch bounty bill, entitled &quot;An act to revive the navigation and
+commercial interests of the United States,&quot; made provision for the
+remission of duties upon the raw materials entering into the
+construction of sailing and steam-ships; for the taking in bond, free of
+duty, of all stores used in vessels in sailing to foreign ports; and for
+bounties, or subsidies, to American sailing and steam-ships engaged in
+foreign commerce, already built as well as to be built: the aid being
+extended to those already built because they had been sailed during the
+Civil War and since &quot;at great disadvantage.&quot;<a name='FNanchor_HE_213'></a><a href='#Footnote_HE_213'><sup>[HE]</sup></a> The amount of duties to
+be remitted was to be equal to the amount per ton collected on the
+materials required for certain defined classes of ships: on wooden
+vessels, eight dollars a ton; on iron, twelve dollars a ton; on
+composite vessels (vessels composed of <a name='Page_82'></a>iron frames and wooden
+planking), twelve dollars a ton; on iron steamers, fifteen dollars a
+ton. Where American materials were used in the construction of iron or
+composite vessels, allowance was to be made of an amount equivalent to
+the duties imposed on similar articles of foreign manufacture. The
+bounties were thus classified: to owners of American registered ships
+engaging for more than six months in a year in the carrying trade
+between America and foreign ports, or between ports of foreign
+countries, a dollar and a half per ton upon a sailing-ship each year so
+engaged, and a dollar and a half upon a steamer running to and from the
+ports of the British North American provinces; four dollars upon a
+steamer running to and from any European port; and three dollars to and
+from all other foreign ports.<a href='#Footnote_HF_214'><sup>[HF]</sup></a></p>
+
+<p>The intent of the second bill, &quot;imposing tonnage duties and for other
+purposes,&quot; was the readjustment of the existing tax upon tonnage so that
+it should fall &quot;more equitably upon the different classes of vessels
+affected thereby.&quot;<a name='FNanchor_HF_214'></a><a href='#Footnote_HF_214'><sup>[HF]</sup></a> It removed all tonnage, harbor, pilotage, and
+other like taxes imposed upon shipping by State and municipal authority
+(except wharfage, pierage, and dockage); and imposed a duty of thirty
+cents per ton on all ships, vessels, or steamers entered in the United
+States.</p>
+
+<p>The committee's measures were ably advocated, but they finally went down
+in defeat.</p>
+
+<hr style='width: 45%;' />
+
+<p>In 1872 the Pacific Mail Steamship Company came forward with an offer to
+add another monthly mail-steamship service to Japan and China, for an
+additional subsidy of a half million dollars a year. At the same session
+a project to establish a subsidized line to Australia was introduced;
+another, for a subsidized line from New Orleans to Cuba. These failed,
+while the scheme of the Pacific Mail won. A bill authorizing such
+contract was enacted June 1, that year, after prolonged and warm
+debates, and by close votes in House and Senate. Two years afterwards it
+was discovered that bribery had been employed in securing the passage of
+that act; the charge being that a million dollars had been <a name='Page_83'></a>spent by a
+corrupt lobby in pushing the bill through.<a name='FNanchor_HG_215'></a><a href='#Footnote_HG_215'><sup>[HG]</sup></a> Upon these disclosures,
+and because the company had failed to fulfil its conditions, Congress,
+by act of March 3, 1875, abrogated the contract.<a name='FNanchor_HH_216'></a><a href='#Footnote_HH_216'><sup>[HH]</sup></a> In 1877 the first
+contract with the Pacific Mail for the Japan and China service, expired.
+During its ten years' term the company had received from the Government
+a total of $4,583,333.33.<a name='FNanchor_HI_217'></a><a href='#Footnote_HI_217'><sup>[HI]</sup></a></p>
+
+<p>With the Pacific Mail exposure the word subsidy became unsavory to the
+public taste, and for some years after no subsidy measure, however
+carefully guarded or respectably backed, could find favor in Congress. A
+second project for subsidizing a new line to Brazil, proposed by John
+Roach, the noted American shipbuilder, in 1879, was among those
+ventured, only to fail.</p>
+
+<hr style='width: 45%;' />
+
+<p>A decade later, in 1889, when conditions seemed to be growing more
+propitious, the subject was revived with vigor by the introduction of a
+navigation subsidy bill proposed by the American Shipping League.<a name='FNanchor_HJ_218'></a><a href='#Footnote_HJ_218'><sup>[HJ]</sup></a>
+From this evolved in 1890 a tonnage bounty bill reported in the House by
+Representative James M. Farquhar of New York.<a name='FNanchor_HK_219'></a><a href='#Footnote_HK_219'><sup>[HK]</sup></a> The final outcome,
+indirectly, of these moves was the re&euml;stablishment of the postal subsidy
+system, abandoned in 1858, in the enactment March 3, 1891, of what is
+known as the Postal Aid Law.</p>
+
+<p>This one ship-subsidy law now on the statutes was in its original draft
+one of two proposed measures, termed respectively the Mail Ship Bill and
+the Cargo Ship Bill, both reported in the Senate by Senator William P.
+Frye of Maine. The Cargo Bill provided for navigation bounties to
+sailing-ships and steamers. The objects of these measures, as stated by
+the promoters, were &quot;(1) to secure regular and quicker service to
+countries now reached; (2) to make new and direct commercial exchanges
+with countries not now reached; (3) to develop new and enlarge old
+markets <a name='Page_84'></a>in the interest of producers and consumers under the
+reciprocity treaties completed and under consideration; (4) to assist
+the promotion of a powerful naval reserve; (S) to establish a
+training-school for American seamen.&quot;<a name='FNanchor_HL_220'></a><a href='#Footnote_HL_220'><sup>[HL]</sup></a></p>
+
+<p>Both bills passed the Senate, but the House rejected the Cargo Bill and
+passed the Mail Bill only after amending it essentially. The subsidy
+rate was cut one-third on steamers of the first class&mdash;the highest class
+of ocean liners,<a name='FNanchor_HM_221'></a><a href='#Footnote_HM_221'><sup>[HM]</sup></a>&mdash;and was reduced on the second class. The act as
+finally approved comprises the following features:</p>
+
+<p>Empowering the postmaster-general to contract for terms of from five to
+ten years with American citizens for carrying the mails on American
+steamships between ports of the United States and ports in foreign
+countries, the Dominion of Canada excepted; the service on such lines
+&quot;to be equitably distributed among the Atlantic, Mexican Gulf, and
+Pacific ports.&quot; Proposals to be invited by public advertisement three
+months before the letting of a contract; and the contract to go to the
+lowest responsible bidder. The steamships employed, to be
+American-built, owned and officered by American citizens; and the
+following proportion of the crews American citizens, to wit: &quot;during the
+first two years of each contract, one-fourth thereof; during the next
+three succeeding years, one-third thereof; and during the remaining time
+of the continuance of such contract, at least one-half thereof.&quot; The
+subsidized steamships are ranked in four classes: in the first class,
+iron or steel screw steamships, capable of making a speed of twenty
+knots an hour at sea of ordinary weather, and of a gross tonnage of not
+less than 8,000 tons; second class, iron or steel, speed of sixteen
+knots, 5,000 tons; third class, iron or steel, fourteen knots, 2,500
+tons; fourth class, iron or steel, or wooden, twelve knots, 1,500 tons.
+Only those of the first class eligible to the contract service between
+the United States and Great Britain. All except the fourth class to be
+constructed under the supervision of the Navy Department, with
+particular reference to prompt and economical conversion into auxiliary
+cruisers, of sufficient <a name='Page_85'></a>strength and stability to carry and sustain at
+least four effective rifled cannon of a calibre of not less than six
+inches; and to be of the highest rating known to maritime commerce.</p>
+
+<p>The subsidy, or rate of compensation, as it is termed, for mail-carriage
+is thus fixed in each class: first class, not exceeding four dollars (in
+the original draft six dollars) a mile; second class, two dollars a
+mile, by the shortest practicable route for each outward voyage; third
+class, one dollar a mile; fourth class, two-thirds of a dollar a mile
+for the actual number of miles required by the Post Office Department to
+be travelled on each outward bound voyage. Pro rata deductions from the
+compensations, and penalties, are imposed for omission of a voyage or
+voyages, and for delays or irregularities in service. No steamship in
+the contract service is to receive any other bounty or subsidy from the
+national treasury. Sanction is given to naval officers to volunteer for
+service on the contract mail steamships; and, while so employed, they
+are to receive furlough pay in addition to their steamship pay, provided
+they are required to perform such duties as appertain to the merchant
+service. The training-school for seamen is established by a provision
+requiring that the contract steamers &quot;shall take cadets or apprentices,
+one American-born boy for each thousand tons gross register, and one for
+each majority fraction thereof, who shall be educated in the duties of
+seamanship, rank as petty officers, and receive such pay for their
+services as may be reasonable.&quot;<a name='FNanchor_HN_222'></a><a href='#Footnote_HN_222'><sup>[HN]</sup></a></p>
+
+<p>The first advertisements for proposals under this act resulted in
+contracts with eleven existing lines, of the third and fourth classes.
+No bids were received for the North Atlantic service calling for
+American-built steamships in the first class. But an offer was made by
+the American Line<a name='FNanchor_HO_223'></a><a href='#Footnote_HO_223'><sup>[HO]</sup></a> to begin the performance of the service with two
+British-built liners&mdash;the <i>City of New York</i> and the <i>City of
+Paris</i>&mdash;acquired from the Inman Line, if these steamers <a name='Page_86'></a>were admitted
+to American registry, the company agreeing immediately to order two
+similar ships from American shipyards and add these to their fleet. The
+proposition was accepted, and a supplementary act was passed (May 10,
+1892), legalizing such registry.<a name='FNanchor_HP_224'></a><a href='#Footnote_HP_224'><sup>[HP]</sup></a> The new American ships were
+promptly built,&mdash;the <i>St. Louis</i> and the <i>St. Paul</i>, launched November,
+1894, and April, 1895, respectively,&mdash;each 11,600 tons, &quot;larger,
+swifter, safer, and more luxurious&quot;<a name='FNanchor_HQ_225'></a><a href='#Footnote_HQ_225'><sup>[HQ]</sup></a> than the two British-built
+vessels: a perfection of workmanship deemed a matter for congratulation
+by patriotic Americans. To this extent at least the subsidy law was
+declared to have been beneficent.</p>
+
+<p>It had become evident, however, that the law was not fostering the
+establishment of new American-owned and American-built steamship lines
+as its promoters had hoped. In 1893 the contract service had been
+reduced by the discontinuance of three of the routes. In 1894 only three
+contracts were in operation. Up to 1898 no lines had been established on
+the Pacific under the law.</p>
+
+<p>In the judgment of the subsidy advocates the law's failure to produce
+the anticipated results only proved its inadequacy in not providing
+enough subsidy. Accordingly, further measures were proposed affording a
+more generous supply.</p>
+
+<p>In December, 1898, Senator Mark Hanna, of Ohio, brought forward a bill
+providing liberal navigation and speed bounties to all American vessels
+engaged in the foreign trade. This measure, as defined by its title,
+proposed &quot;to promote the commerce and increase the foreign trade of the
+United States, and to promote auxiliary cruisers, transports, and seamen
+for Government use when necessary.&quot; The subsidy was again termed
+&quot;compensation.&quot; It was to be payable on gross tonnage for mileage sailed
+both outward and homeward bound, according to speed. The rate to
+steamships showing on trial test a speed above fourteen knots was to
+increase proportionately; sailing-ships and steamers of less trial speed
+than fourteen knots, were to receive the lowest rate. This was fixed at
+one dollar <a name='Page_87'></a>and fifteen cents per gross ton for each hundred of the
+first fifteen hundred miles sailed both outward and homeward bound, and
+one cent per gross ton for each hundred miles over one hundred miles
+both ways. The additional speed bounties ranged from one cent per gross
+ton for steamers of 1,500 tons and speeding fourteen knots, to 3.2 cents
+for those over 10,000 tons and showing twenty-three knots. The act was
+to be in force for a term of twenty years, and no contracts were to be
+made under it after ten years.</p>
+
+<p>The Hanna bill met strong opposition, and was finally dropped. A
+substitute measure, drawn by Senator Frye, of Maine, took its place.
+This also was lost with the adjournment of the Fifty-seventh Congress.
+At the opening of the next Congress, in December, 1901, Senator Frye
+introduced his bill in an amended form. This offered subsidies to
+contract mail-steamships based upon tonnage and speed, and practically
+restored the rates of the original Postal Aid Bill. It further provided
+a fixed subsidy upon tonnage to other American steamers and
+sailing-ships, registered, and to be built in the United States. The
+bill passed the Senate, but failed with the House.</p>
+
+<hr style='width: 45%;' />
+
+<p>In 1903 the matter was taken up with greater vigor, by President
+Roosevelt. In his annual message to Congress December 7, the President,
+&quot;deeply concerned at the decline of our ocean fleet and the loss of
+skilled officers and seamen,&quot; recommended the appointment by Congress of
+a joint commission to investigate and report at the next session, &quot;what
+legislation is desirable or necessary for the development of the
+American merchant marine and American commerce, and, incidentally, of a
+national ocean mail service of adequate auxiliary naval cruisers and
+naval reserves.&quot;</p>
+
+<p>In response Congress by act of April 28, 1904, created the Merchant
+Marine Commission with power to make the broadest kind of an inquiry.
+This body was composed of five Senators and five Representatives, two of
+the Senators and two of the Representatives members of the minority
+<a name='Page_88'></a>party. Senator Jacob H. Gallinger of New Hampshire was chairman. Eight
+months between the adjournment and reassembling of Congress was devoted
+to its appointed task. All the larger ports of the country were visited,
+its itinerary embracing the principal cities on the North Atlantic
+seaboard, on the Great Lakes, on the Pacific coast, and on the southern
+coast and Gulf of Mexico. Hearings were given in all these places to
+hundreds of citizens: commercial bodies, shipbuilders, shipowners,
+shipping merchants, merchants in general trade, manufacturers, bankers,
+lawyers, editors, doctrinaires. So wide indeed was the investigation,
+and so liberal the &quot;open door&quot; rule, admitting for consideration any
+&quot;intelligent suggestion offered in good faith,&quot; that &quot;alien agents&quot; of
+foreign steamships were heard with the rest.<a href='#Footnote_HR_226'><sup>[HR]</sup></a> While differences of
+opinion as to methods and policies naturally were encountered, the
+commission declared that it found public sentiment, as this was sounded
+throughout the United States, &quot;practically unanimous not in merely
+desiring, but in demanding an American ocean fleet, built, owned,
+officered, and so far as may be, manned by our own people.&quot; This
+sentiment was &quot;just as earnest on the Great Lakes ... as on either
+ocean.&quot;<a name='FNanchor_HR_226'></a><a href='#Footnote_HR_226'><sup>[HR]</sup></a></p>
+
+<p>The results of the investigation were embodied in an elaborate report,
+comprising majority and minority reports of the commission, and the mass
+of testimony taken at the hearings: the whole filling three large
+pamphlet volumes, in all of nearly two thousand pages.<a name='FNanchor_HS_227'></a><a href='#Footnote_HS_227'><sup>[HS]</sup></a></p>
+
+<p>The majority reported a bill. This was presented as merely an extension
+of the principles of the Postal Aid Act of 1891, involving &quot;no new
+departure from the established practice of the Government.&quot; Its ocean
+mail sections were intended &quot;simply to strengthen the existing act on
+lines where it has happened to prove inadequate.&quot; The subsidies which it
+granted were termed, inoffensively, &quot;subventions,&quot; and its promoters
+protested that these &quot;subven<a name='Page_89'></a>tions&quot; were &quot;not in any opprobrious sense a
+subsidy or bounty.&quot; They were &quot;not bounties outright, or mere commercial
+subsidies such as many of our contemporaries give.&quot; They were &quot;granted
+frankly in compensation for public services rendered and to be
+rendered.&quot;<a name='FNanchor_HT_228'></a><a href='#Footnote_HT_228'><sup>[HT]</sup></a></p>
+
+<p>The proposed measure, however, was more than an extension of the act of
+1891. Its scope was indicated by its title: &quot;To promote the national
+defence, to create a force of naval volunteers, to establish American
+ocean mail lines to foreign markets, to promote commerce, and to provide
+revenue from tonnage.&quot; The subsidies offered comprised mail subventions
+to steamships; subventions to general cargo carriers and deep-sea
+fishing-ships, both steam and sail; and retainers to officers and men of
+American merchant ships and deep-sea fishing vessels enrolling as naval
+volunteers. It opened with provisions for the establishment of a naval
+reserve.</p>
+
+<p>The new mail subsidies provided for ten specified lines of &quot;steamships
+of the United States&quot; of sixteen, fourteen, thirteen, and twelve knots
+speed, to the greater countries of South America, to Central America, to
+Africa, and to the Orient, with a total maximum subsidy for the ten
+lines of $2,665,000 a year. In all contracts it was to be specified that
+the steamships must carry in their own crews a certain increasing
+proportion, up to one-fourth, of men enrolled as naval volunteers. The
+subventions to American general cargo carriers, or the &quot;tramp&quot; type of
+ships, and deep-sea fishing-vessels, steam or sail, were fixed at these
+rates: those engaged in the foreign trade for a full year, five dollars
+per gross ton; so engaged for nine months and less than a year, four
+dollars; for six months, two dollars. These subsidies were conditioned
+upon these requirements: the employment in the crews of a certain
+proportion of naval volunteers; one-sixth of the crews to be citizens of
+the United States or &quot;men who have declared their intentions to become
+citizens;&quot; ships to carry the mails when required free of charge; all
+ordinary repairs to be made in the United States; the ships to be in
+readiness for Government taking for naval service in time of need. The
+pay<a name='Page_90'></a>ments in this class were to be made on contracts for a year at a
+time, renewable from year to year; and no vessel was to receive them for
+a longer period than ten years. The retainers to officers and men of the
+merchant marine and deep-sea fishing-ships as inducements to enroll as
+naval volunteers, were fixed at rates ranging from a hundred dollars a
+year for the master or chief engineer of a large steamship to
+twenty-five dollars for a sailor or fireman, and fifteen dollars for a
+boy, these retainers being independent of their regular pay. The
+provisions relating to tonnage revenue increased the tonnage taxes on
+all vessels, American and foreign, entering American ports, with a
+rebate of eighty per cent of the tonnage duties allowed to American
+ships carrying American boys as apprentices and training them in
+seamanship or engineering for the merchant service and naval
+reserve.<a name='FNanchor_HU_229'></a><a href='#Footnote_HU_229'><sup>[HU]</sup></a></p>
+
+<p>The minority report, signed by three of the four Democratic members of
+the commission, although outlining measures of relief which, in the
+judgment of the signers, would &quot;accomplish substantial and permanent
+good without injustice to any other American interest and without doing
+violence to any fundamental principle of right or of organic law,&quot;
+proposed no bill. While the minority &quot;saw objections to the entire bill&quot;
+recommended by the majority, they were disposed to withhold any
+opposition except to the sections providing for direct subsidies. These
+they declared to be &quot;so obnoxious to Democratic principles and to the
+economic sense of the country&quot; that they were compelled to enter their
+&quot;earnest protest against their enactment into law.&quot; Instead of
+subsidies, the remedial legislation which they outlined included: a
+return to the discriminating-duty policy; and the putting on the free
+list of all materials which enter into the construction of ships no
+matter whether intended for foreign or domestic trade,&mdash;thus admitting
+ships built from foreign materials, in whole or in part, to the
+coastwise trade, from which they are now excluded. The minority held
+also that it would probably &quot;<a name='Page_91'></a>be necessary to remove the duties not only
+for materials but from all materials sold cheaper abroad than at home,&quot;
+meaning steel and iron products. &quot;In this way, and in this way only,
+will our shipbuilders be enabled to obtain our materials at the prices
+at which they are sold to foreign shipbuilders.&quot;<a name='FNanchor_HV_230'></a><a href='#Footnote_HV_230'><sup>[HV]</sup></a></p>
+
+<p>The report of the commission was submitted to the Fifty-eighth Congress,
+third session, January 4, 1905.<a name='FNanchor_HW_231'></a><a href='#Footnote_HW_231'><sup>[HW]</sup></a> No action was had on the bill in
+that Congress. It was referred to the committee on commerce; reported
+back to the Senate with sundry amendments and a minority report against
+it;<a name='FNanchor_HX_232'></a><a href='#Footnote_HX_232'><sup>[HX]</sup></a> was debated tentatively; and finally passed over at the request
+of its sponsor, Senator Gallinger, who expressed himself as satisfied
+that the bill could not receive the consideration it deserved at that
+session. Meanwhile both Houses had directed a continuance of the
+commission's inquiry. In May the chairman, Senator Gallinger, held
+conferences in New York with several representatives of the shipping
+interests who had not been heard; and later sessions were held in
+Washington, at which other statements were received and considered.</p>
+
+<p>At the opening of the Fifty-ninth Congress, December 4, 1905, Senator
+Gallinger submitted a supplementary report of the commission, and with
+it introduced a new bill&mdash;the previous bill in a new draft.<a name='FNanchor_HY_233'></a><a href='#Footnote_HY_233'><sup>[HY]</sup></a> At the
+same time Representative Charles H. Grosvenor, of Ohio, the first House
+member of the commission, introduced the bill to the House.</p>
+
+<p>This draft added several new features to the original bill. The most
+important were provisions for increasing the subsidies payable under the
+law of 1891 to the single American contract line to Europe, and to the
+Oceanic Line from San Francisco to Auckland and Sydney. These provisions
+added two hundred and fifty thousand dollars to the former's subsidy of
+seven hundred and fifty thousand, and two hundred and seventeen thousand
+to the latter's of two hundred and eighty-three thousand. The reasons
+given for <a name='Page_92'></a>these increases were: in the case of the American Line,
+because this line &quot;meets the fiercest competition of the State-aided
+corporations of Europe, soon to be intensified by the new subvention of
+one million one hundred thousand dollars granted to the Cunard Company
+by the British Government, on terms so liberal as to make it equivalent
+to one and a half million dollars a year&quot;; and in the case of the
+Australasia Line, because it &quot;operates in Pacific waters where cost of
+fuel, labor, etc., is considerably greater than at Atlantic ports; ...
+is required to maintain a very high speed; ... employs exclusively white
+crews instead of the Asiatics utilized by many other Pacific companies.&quot;
+Another provision, as a special encouragement for American shipowners to
+enter the Philippine trade, added a subvention of thirty per cent above
+the regular rate, or six and a half dollars a ton. The naval volunteer
+retainers were extended to seamen of the Great Lakes and coastwise
+trade.<a name='FNanchor_HZ_234'></a><a href='#Footnote_HZ_234'><sup>[HZ]</sup></a></p>
+
+<p>In the Senate the bill fared well as a whole. Like the original bill it
+came back from the committee on commerce amended, though slightly, and
+with a minority report against it: the minority again emphasizing their
+&quot;unqualified opposition to this renewed effort to donate to certain
+favored interests moneys collected by the Government for public purposes
+under its power of taxation.&quot;<a name='FNanchor_IA_235'></a><a href='#Footnote_IA_235'><sup>[IA]</sup></a> It was closely fought by the
+opposition in debate, opened with Senator Gallinger's argument in its
+behalf on January 8, 1906. But it successfully ran the gauntlet. Further
+amended in several particulars, but unscathed in its essential parts, it
+passed the Senate, February 14, by a vote of 38 to 27, five Republican
+Senators and all the Democrats voting in the negative.<a name='FNanchor_IB_236'></a><a href='#Footnote_IB_236'><sup>[IB]</sup></a></p>
+
+<p>In the House its progress was less prosperous. It lay with the committee
+on merchant marine and fisheries into the second session of this
+Congress; and more hearings were given. Reframed after the enacting
+clause, but practically the same in principle, it was reported back
+January 19 (1907) by Mr. Grosvenor, accompanied by an explanatory
+<a name='Page_93'></a>report of the majority of the committee;<a href='#Footnote_IC_237'><sup>[IC]</sup></a> and bill and report were
+referred to the whole House on the state of the Union. Later the views
+of the minority were filed.<a name='FNanchor_IC_237'></a><a href='#Footnote_IC_237'><sup>[IC]</sup></a> On January 23 a message from President
+Roosevelt in behalf of the measure was received. The president
+particularly urged the &quot;great desirability of enacting legislation to
+help American shipping and American trade by encouraging the building
+and running of lines of large and swift steamers to South America and
+the Orient.&quot; As striking evidence of the &quot;urgent need of our country's
+making an effort to do something like its share of its own carrying
+trade on the ocean,&quot; he directed attention to the address of Secretary
+Root before the Trans-Mississippi Commercial Congress at Kansas City,
+Mo., the previous November, giving the results of the secretary's
+experiences on his recent South American tour. The proposed law, Mr.
+Roosevelt repeated, was in no sense experimental. It was &quot;based on the
+best and most successful precedents, as for instance on the recent
+Cunard contract with the British Government.&quot; So far as South America
+was concerned, its aim was to &quot;provide from the Atlantic and Pacific
+coasts better American lines to the great ports of South America than
+the present European lines.&quot; Under it &quot;our trade friendship&quot; would &quot;be
+made evident to the South American Republics.&quot;<a name='FNanchor_ID_238'></a><a href='#Footnote_ID_238'><sup>[ID]</sup></a></p>
+
+<p>Backed by the explanatory report and this message, the friends of the
+measure opened the debate, February 25, Mr. Grosvenor leading. It was a
+great debate, long and hot. Numerous amendments were put in; some
+changing the proposed routes, others adding new ones. At length on March
+1, three days before the end of this Congress, the much amended bill was
+passed, and went back to the Senate for concurrence.<a name='FNanchor_IE_239'></a><a href='#Footnote_IE_239'><sup>[IE]</sup></a></p>
+
+<p>As it now stood it was shorn of the provisions for lines from the
+Pacific coast to Japan, China, the Philippines, and Australasia. The new
+subsidized lines were all to run to South America. Two of these were to
+run from the Atlantic coast to Brazil and Argentina, respectively; one,
+from the <a name='Page_94'></a>Pacific coast to Peru and Chile; and one from the Gulf of
+Mexico to Brazil. On all four lines sixteen-knot steamers were required,
+with speed on the average above the European mail lines to South
+America. The subsidies were reserved exclusively to ships to be built in
+the United States, so that the mail service could not be performed by
+existing steamers; thus a wholly new ocean-mail fleet was
+guaranteed.<a name='FNanchor_IF_240'></a><a href='#Footnote_IF_240'><sup>[IF]</sup></a></p>
+
+<p>The bill was reached in the Senate March 2, and strenuous efforts were
+made by Senator Gallinger and others to push it through. But it failed
+in the closing hours of the session to reach a vote. So this measure
+fell.<a name='FNanchor_IG_241'></a><a href='#Footnote_IG_241'><sup>[IG]</sup></a></p>
+
+<p>Another effort was made in the Sixtieth Congress. In his message at the
+beginning of this Congress (December 2, 1907) President Roosevelt
+recommended an amendment to the act of March 3, 1891, &quot;which shall
+authorize the postmaster-general in his discretion to enter into
+contracts for the transportation of mails to the Republics of South
+America, to Asia, the Philippines, and Australia at a rate not to exceed
+four dollars a mile for steamships of sixteen-knots speed or upward,
+subject to the restrictions and obligations&quot; of that act. In other
+words, to give the same subsidy to steamers in these services as allowed
+to the twenty-knot American mail transatlantic line, instead of two
+dollars a mile.<a name='FNanchor_IH_242'></a><a href='#Footnote_IH_242'><sup>[IH]</sup></a> A bill to this effect was introduced in the Senate
+December 4<a name='FNanchor_II_243'></a><a href='#Footnote_II_243'><sup>[II]</sup></a>; on February 3, 1908, was reported back from the
+committee on commerce so amended as to provide the four-dollar-a-mile
+subsidy to American sixteen-knot steamers on routes of four thousand
+miles or more to South America, the Philippines, Japan, China, and
+Australasia; was debated at length; further amended; and finally,
+passed, March 20. In the House it was referred to the committee on post
+office and post roads;<a name='FNanchor_IJ_244'></a><a href='#Footnote_IJ_244'><sup>[IJ]</sup></a> issued therefrom in a dew draft;<a name='FNanchor_IK_245'></a><a href='#Footnote_IK_245'><sup>[IK]</sup></a> debated;
+and finally failed to pass. <a name='Page_95'></a>Thereupon the subsidized service to
+Australia by way of Honolulu and the Samoan group was abandoned.</p>
+
+<p>Again the measure was pressed in the Sixty-first Congress. It now had
+the backing of President Taft. In his annual message December 9, 1909,
+&quot;following,&quot; as he graciously said, &quot;the course of my distinguished
+predecessor,&quot; he earnestly recommended the passage of a &quot;ship-subsidy
+bill looking to the establishment of lines between our Atlantic seaboard
+and the eastern coast of South America, China, Japan, and the
+Philippines.&quot; The bill, as introduced by Senator Gallinger (February 23,
+1910), provided for subsidized lines of the second and third classes on
+routes to the points named by Mr. Taft, four thousand miles or more in
+length outward voyage, or on routes to the Isthmus of Panama: the second
+class to receive the subsidy rate per mile provided in the law of 1891
+for steamers of the first class, and the third class the rate applicable
+to the second class. If no contract should be made for a line between a
+Southern port and South American ports, and two or more should be
+established from Northern Atlantic ports, it was required that one of
+the latter should touch outward and homeward at two ports of call south
+of Cape Charles. The total expenditure for foreign mail-service in any
+one year was limited&mdash;not to exceed the estimated revenue therefrom for
+that year.<a name='FNanchor_IL_246'></a><a href='#Footnote_IL_246'><sup>[IL]</sup></a></p>
+
+<p>The bill came back from the committee on commerce in March without
+amendment, and with a report.<a name='FNanchor_IM_247'></a><a href='#Footnote_IM_247'><sup>[IM]</sup></a> In June it was put over for
+consideration in December of the third session of this Congress. When at
+length it was reached, Senator Gallinger submitted a substitute. This,
+instead of naming the points to be covered, provided for subsidized
+routes to South America south of the equator outward voyage; provided
+for one port of call instead of two on the Southern Atlantic coast;
+guarded against &quot;discrimination detrimental to the public interest,&quot; in
+other words &quot;combines,&quot; by a provision that no contract be awarded to
+any bidder engaged in any competitive transportation business <a name='Page_96'></a>by rail,
+or in the business of exporting or importing on his own account, or
+bidding for or in the interest of any person or corporation engaged in
+such business, or having control thereof through stock ownership or
+otherwise; and fixed the limit of the total expenditure for foreign mail
+service in any one year at four million dollars. This substitute was
+finally passed on February 12, 1911, by a vote of 39 to 39, the chairman
+casting his vote in the affirmative. In the House the measure went to
+the committee on post office and post roads; and there rested.</p>
+
+<p>Various other subsidy bills and measures for the revival of the ocean
+merchant marine without subsidies, were put into this Congress, as in
+previous ones, but few escaped from the committees; and these few fell
+short of passage.</p>
+
+<p>FOOTNOTES:</p>
+
+<a name='Footnote_FS_175'></a><a href='#FNanchor_FS_175'>[FS]</a><div class='note'><p> Wells, chaps. 4 and 5, pp. 58-94. Also Rept. of
+commissioner of navigation for 1909.</p></div>
+
+<a name='Footnote_FT_176'></a><a href='#FNanchor_FT_176'>[FT]</a><div class='note'><p> U.S. Statutes at Large. Also Rept. of commission of
+navigation, 1909.</p></div>
+
+<a name='Footnote_FU_177'></a><a href='#FNanchor_FU_177'>[FU]</a><div class='note'><p> Marvin, pp. 240-241.</p></div>
+
+<a name='Footnote_FV_178'></a><a href='#FNanchor_FV_178'>[FV]</a><div class='note'><p> U.S. Statutes at Large, vol. V, p. 748.</p></div>
+
+<a name='Footnote_FW_179'></a><a href='#FNanchor_FW_179'>[FW]</a><div class='note'><p> This contract in Executive Document, 30th Cong., 1st sess,
+no. 50.</p></div>
+
+<a name='Footnote_FX_180'></a><a href='#FNanchor_FX_180'>[FX]</a><div class='note'><p> U.S. Statutes at Large, vol. IX, p. 152.</p></div>
+
+<a name='Footnote_FY_181'></a><a href='#FNanchor_FY_181'>[FY]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_FZ_182'></a><a href='#FNanchor_FZ_182'>[FZ]</a><div class='note'><p> U.S. Statutes at Large, vol. IX, p. 187.</p></div>
+
+<a name='Footnote_GA_183'></a><a href='#FNanchor_GA_183'>[GA]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_GB_184'></a><a href='#FNanchor_GB_184'>[GB]</a><div class='note'><p> For the Sloo contract see Exec. Does., 32nd Congr., 1st
+sess., no. 91.</p></div>
+
+<a name='Footnote_GC_185'></a><a href='#FNanchor_GC_185'>[GC]</a><div class='note'><p> For this contract see Exec. Docs., 32nd Cong., 1st sess.,
+no. 91.</p></div>
+
+<a name='Footnote_GD_186'></a><a href='#FNanchor_GD_186'>[GD]</a><div class='note'><p> Meeker. This contract in Exec. Docs., 32nd Cong., 1st
+sess., no. 91, pp. 71-74.</p></div>
+
+<a name='Footnote_GE_187'></a><a href='#FNanchor_GE_187'>[GE]</a><div class='note'><p> Navy appropriation bills, Aug. 3, 1848, March 3, 1849.</p></div>
+
+<a name='Footnote_GF_188'></a><a href='#FNanchor_GF_188'>[GF]</a><div class='note'><p> U.S. Statutes at Large, vol. IX, p. 188.</p></div>
+
+<a name='Footnote_GG_189'></a><a href='#FNanchor_GG_189'>[GG]</a><div class='note'><p> Exec. Docs., 30th Cong., 1st sess., no. 51.</p></div>
+
+<a name='Footnote_GH_190'></a><a href='#FNanchor_GH_190'>[GH]</a><div class='note'><p> Exec. Docs., 30th Cong., 1st sess., no. 51.</p></div>
+
+<a name='Footnote_GI_191'></a><a href='#FNanchor_GI_191'>[GI]</a><div class='note'><p> Marvin, p. 243.</p></div>
+
+<a name='Footnote_GJ_192'></a><a href='#FNanchor_GJ_192'>[GJ]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_GK_193'></a><a href='#FNanchor_GK_193'>[GK]</a><div class='note'><p> Report in the Senate Sept. 18, 1850, in Exec. Docs., 32nd
+Cong., 1st sess., no. 91, pp. 14-15.</p></div>
+
+<a name='Footnote_GL_194'></a><a href='#FNanchor_GL_194'>[GL]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_GM_195'></a><a href='#FNanchor_GM_195'>[GM]</a><div class='note'><p> For contract see Exec. Docs., 32nd Cong., 1st sess., no.
+91, pp. 154-157.</p></div>
+
+<a name='Footnote_GN_196'></a><a href='#FNanchor_GN_196'>[GN]</a><div class='note'><p> Exec. Docs., 32nd Cong., 1st sess., no. 91, pp. 5-7.</p></div>
+
+<a name='Footnote_GO_197'></a><a href='#FNanchor_GO_197'>[GO]</a><div class='note'><p> Marvin, p. 247. The measurement of these steamers is
+differently given by Spears: p. 26. &quot;When done, the ships were found to
+have fine models&mdash;they rode the waves in a way that excited the
+admiration of all sailors. But the keelsons under the engines were only
+40 inches deep, while the keels were 277 ft. long, and there was 'give'
+enough to rack the engines to pieces.&quot; Spears, p. 267.</p></div>
+
+<a name='Footnote_GP_198'></a><a href='#FNanchor_GP_198'>[GP]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_GQ_199'></a><a href='#FNanchor_GQ_199'>[GQ]</a><div class='note'><p> U.S. Statutes at Large, vol. XI, p. 101; chap. CLXI, Aug.
+18, 1856.</p></div>
+
+<a name='Footnote_GR_200'></a><a href='#FNanchor_GR_200'>[GR]</a><div class='note'><p> Same appropriation act for ocean steamship service, June
+14, 1858.</p></div>
+
+<a name='Footnote_GS_201'></a><a href='#FNanchor_GS_201'>[GS]</a><div class='note'><p> Marvin, p. 279.</p></div>
+
+<a name='Footnote_GT_202'></a><a href='#FNanchor_GT_202'>[GT]</a><div class='note'><p> Meeker gives the details as follows: Bremen line (1847-57)
+$2,000,000; Havre line (1852-57) $750,000; Collins line (1850-58)
+$4,500,000; New York to Aspinwall (1848-58) $2,900,000; Astoria and San
+Francisco to Panama (1848-58) $3,750,000; Charleston to Havana (1848-58)
+$500,000.</p></div>
+
+<a name='Footnote_GU_203'></a><a href='#FNanchor_GU_203'>[GU]</a><div class='note'><p> Marvin, p. 253.</p></div>
+
+<a name='Footnote_GV_204'></a><a href='#FNanchor_GV_204'>[GV]</a><div class='note'><p> Bates, p. 133.</p></div>
+
+<a name='Footnote_GW_205'></a><a href='#FNanchor_GW_205'>[GW]</a><div class='note'><p> Same, p. 143.</p></div>
+
+<a name='Footnote_GX_206'></a><a href='#FNanchor_GX_206'>[GX]</a><div class='note'><p> Marvin, p. 254.</p></div>
+
+<a name='Footnote_GY_207'></a><a href='#FNanchor_GY_207'>[GY]</a><div class='note'><p> George Frisbie Hoar.</p></div>
+
+<a name='Footnote_GZ_208'></a><a href='#FNanchor_GZ_208'>[GZ]</a><div class='note'><p> Marvin, p. 258.</p></div>
+
+<a name='Footnote_HA_209'></a><a href='#FNanchor_HA_209'>[HA]</a><div class='note'><p> Bates, p. 142.</p></div>
+
+<a name='Footnote_HB_210'></a><a href='#FNanchor_HB_210'>[HB]</a><div class='note'><p> United States Statutes at Large, vol. XIII, p. 93.</p></div>
+
+<a name='Footnote_HC_211'></a><a href='#FNanchor_HC_211'>[HC]</a><div class='note'><p> Session of 1866-67.</p></div>
+
+<a name='Footnote_HD_212'></a><a href='#FNanchor_HD_212'>[HD]</a><div class='note'><p> Report of the select committee on the merchant marine, in
+Repts. of Committee, 1870, 41st Cong., 2d Bess., House Kept., no. 28.</p></div>
+
+<a name='Footnote_HE_213'></a><a href='#FNanchor_HE_213'>[HE]</a><div class='note'><p> House Rept., no. 2378, 51st Cong., 2nd sess.</p></div>
+
+<a name='Footnote_HF_214'></a><a href='#FNanchor_HF_214'>[HF]</a><div class='note'><p> House Report, no. 28, 41st Cong., 2d sess.</p></div>
+
+<a name='Footnote_HG_215'></a><a href='#FNanchor_HG_215'>[HG]</a><div class='note'><p> House Docs., no. 598, also Miscellaneous Docs.; nos. 74
+and 255, 42d Cong., 2nd sess.</p></div>
+
+<a name='Footnote_HH_216'></a><a href='#FNanchor_HH_216'>[HH]</a><div class='note'><p> House Docs., no. 268, 43rd Cong., 1st sess.</p></div>
+
+<a name='Footnote_HI_217'></a><a href='#FNanchor_HI_217'>[HI]</a><div class='note'><p> Meeker.</p></div>
+
+<a name='Footnote_HJ_218'></a><a href='#FNanchor_HJ_218'>[HJ]</a><div class='note'><p> House Docs., Rept., no. 601, 51st Cong., 1st sess.</p></div>
+
+<a name='Footnote_HK_219'></a><a href='#FNanchor_HK_219'>[HK]</a><div class='note'><p> Text of this bill in Bates, pp. 411-416.</p></div>
+
+<a name='Footnote_HL_220'></a><a href='#FNanchor_HL_220'>[HL]</a><div class='note'><p> House Rept., no. 3273, 51st Cong., 2d sess.</p></div>
+
+<a name='Footnote_HM_221'></a><a href='#FNanchor_HM_221'>[HM]</a><div class='note'><p> Marvin, p. 414.</p></div>
+
+<a name='Footnote_HN_222'></a><a href='#FNanchor_HN_222'>[HN]</a><div class='note'><p> United States Statutes at Large, vol. XXVI, p. 830.</p></div>
+
+<a name='Footnote_HO_223'></a><a href='#FNanchor_HO_223'>[HO]</a><div class='note'><p> Originally the International Navigation Company
+established in Philadelphia in 1871, and beginning service between
+Philadelphia and Liverpool with four American-built steamships.</p></div>
+
+<a name='Footnote_HP_224'></a><a href='#FNanchor_HP_224'>[HP]</a><div class='note'><p> United States Statutes at Large, vol. XXVII, p. 27.</p></div>
+
+<a name='Footnote_HQ_225'></a><a href='#FNanchor_HQ_225'>[HQ]</a><div class='note'><p> Marvin, p. 421.</p></div>
+
+<a name='Footnote_HR_226'></a><a href='#FNanchor_HR_226'>[HR]</a><div class='note'><p> Report of The Merchant Marine Commission (1904), vol. I,
+p. III.</p></div>
+
+<a name='Footnote_HS_227'></a><a href='#FNanchor_HS_227'>[HS]</a><div class='note'><p> Report of The Merchant Marine Commission, together with
+the testimony taken at the Hearings, 3 Vols., p. 1985; Senate Report,
+no. 2755, 58th Cong., 3d sess.</p></div>
+
+<a name='Footnote_HT_228'></a><a href='#FNanchor_HT_228'>[HT]</a><div class='note'><p> Same: Report of the majority, vol. I, pp. XXIII, XXX,
+XXXI.</p></div>
+
+<a name='Footnote_HU_229'></a><a href='#FNanchor_HU_229'>[HU]</a><div class='note'><p> This bill in Report of the Merchant Marine Commission,
+vol. I, pp. XLVI, LI.</p></div>
+
+<a name='Footnote_HV_230'></a><a href='#FNanchor_HV_230'>[HV]</a><div class='note'><p> Rept. of The Merch. Marine Com., Views of the Minority,
+Vol. I, p. LVI.</p></div>
+
+<a name='Footnote_HW_231'></a><a href='#FNanchor_HW_231'>[HW]</a><div class='note'><p> Senate bill, 6291, 58th Cong., 3d sess.</p></div>
+
+<a name='Footnote_HX_232'></a><a href='#FNanchor_HX_232'>[HX]</a><div class='note'><p> Senate Report no. 2949, 58th Cong., 3d sess.</p></div>
+
+<a name='Footnote_HY_233'></a><a href='#FNanchor_HY_233'>[HY]</a><div class='note'><p> Senate Report no. 1, 59th Cong., 1st sess.</p></div>
+
+<a name='Footnote_HZ_234'></a><a href='#FNanchor_HZ_234'>[HZ]</a><div class='note'><p> Senate Report no. I, 59th Cong., 1st sess. This bill is
+Senate no. 529.</p></div>
+
+<a name='Footnote_IA_235'></a><a href='#FNanchor_IA_235'>[IA]</a><div class='note'><p> Senate Report no. 10, 59th Cong., 1st sess.</p></div>
+
+<a name='Footnote_IB_236'></a><a href='#FNanchor_IB_236'>[IB]</a><div class='note'><p> Cong. Record, vol. 40, part I, 59th Cong., 2d sess.</p></div>
+
+<a name='Footnote_IC_237'></a><a href='#FNanchor_IC_237'>[IC]</a><div class='note'><p> House Report no. 6442, 59th Cong., 2d sess.</p></div>
+
+<a name='Footnote_ID_238'></a><a href='#FNanchor_ID_238'>[ID]</a><div class='note'><p> House Doc. no. 4638, 59th Cong., 2d sess.</p></div>
+
+<a name='Footnote_IE_239'></a><a href='#FNanchor_IE_239'>[IE]</a><div class='note'><p> Cong. Record, vol. 41, part 5, 59th Cong., 2d sess., p.
+4378.</p></div>
+
+<a name='Footnote_IF_240'></a><a href='#FNanchor_IF_240'>[IF]</a><div class='note'><p> Cong. Record, 59th Cong., 2d sess., p. 4688.</p></div>
+
+<a name='Footnote_IG_241'></a><a href='#FNanchor_IG_241'>[IG]</a><div class='note'><p> Same, p. 4653.</p></div>
+
+<a name='Footnote_IH_242'></a><a href='#FNanchor_IH_242'>[IH]</a><div class='note'><p> Senate Report no. 168, 60th Cong., 1st sess.</p></div>
+
+<a name='Footnote_II_243'></a><a href='#FNanchor_II_243'>[II]</a><div class='note'><p> Senate bill no. 28, 60th Cong., 1st sess.</p></div>
+
+<a name='Footnote_IJ_244'></a><a href='#FNanchor_IJ_244'>[IJ]</a><div class='note'><p> Cong. Record, 65th Cong., p. 3743.</p></div>
+
+<a name='Footnote_IK_245'></a><a href='#FNanchor_IK_245'>[IK]</a><div class='note'><p> House bill no. 22301, 60th Cong., 1st sess.</p></div>
+
+<a name='Footnote_IL_246'></a><a href='#FNanchor_IL_246'>[IL]</a><div class='note'><p> Senate bill no. 6708, 60th Cong., 2d Sess.</p></div>
+
+<a name='Footnote_IM_247'></a><a href='#FNanchor_IM_247'>[IM]</a><div class='note'><p> Senate Report no. 354, same.</p></div>
+
+
+
+<hr style='width: 65%;' />
+<a name='CHAPTER_XIV'></a><h2><a name='Page_97'></a>CHAPTER XIV</h2>
+
+<p style='text-align: center;'>SUMMARY</p>
+<br />
+
+<p>Ship subsidies, open or concealed, are now granted by nearly every
+maritime nation. Whatever may be the designation of these Government
+grants,&mdash;whether mail subsidies, naval subventions, retaining fees for
+possible naval service, construction bounties, navigation bounties,
+trade bounties, Government loans, Government partnerships, tariff
+advantages, canal refunds,&mdash;whatever may be their form, all are
+distinctly Government aids, direct or indirect, the primary object of
+which is the development and expansion of the merchant marine of each
+nation granting them; and generally, if not universally, the upbuilding
+of this marine for service in time of need as an auxiliary to the
+national navy.</p>
+
+<p>Summarized, the various grants of the various nations thus appear:</p>
+
+<p><i>Great Britain</i> grants mail subsidies, and admiralty subventions; her
+colonies, steamship subsidies.</p>
+
+<p><i>France</i>: mail subsidies; construction and navigation bounties;
+fisheries bounties.</p>
+
+<p><i>Germany</i>: mail subsidies; steamship subsidies; preferential rates on
+the State railroads for shipbuilding materials.</p>
+
+<p><i>Belgium</i>: premiums to certain steamship lines; pilotage refunds.</p>
+
+<p><i>Austria-Hungary</i>: mail subsidies; construction and navigation bounties;
+Suez Canal refunds. Hungary; bounties to Hungarian ships.</p>
+
+<p><i>Italy</i>: mail subsidies; construction and navigation bounties.</p>
+
+<p><i>Spain</i>: mail subsidies; construction and navigation bounties.</p>
+
+<p><i>Portugal</i>: mail subventions to steamship companies.</p>
+
+<p><i>Denmark</i>: trade subsidies; exemptions from harbor dues.</p>
+
+<p><i>Sweden</i>: State contributions&mdash;loans to steamship companies.</p>
+
+<p><a name='Page_98'></a><i>Norway</i>: State contributions; trade subsidies.</p>
+
+<p><i>Russia</i>: mail subsidies; mileage subsidies; Government loans; steamship
+subsidies; Suez Canal refunds.</p>
+
+<p><i>Japan</i>: State aid to steamship companies; mail subsidies; construction
+and navigation bounties; fisheries bounties.</p>
+
+<p><i>China</i>: State aid to steamship companies; subsidies to ship-yards.</p>
+
+<p><i>South America</i>: Brazil and Argentina, subsidies to foreign steamship
+companies.</p>
+
+<p><i>United States</i>: mail subsidies to seven steamship lines.</p>
+
+<p>The United States confines the coastwise trade to American ships, and
+these are exempted from tonnage dues. It excludes foreign-built ships
+from American registry, admitting only American ships, or those taken in
+war as prizes or forfeited for a breach of United States laws, belonging
+to American citizens.<a name='FNanchor_IN_248'></a><a href='#Footnote_IN_248'><sup>[IN]</sup></a> Ownership of American ships is restricted to
+&quot;citizens of the United States, or a corporation organized under the
+laws of any of the States thereof.&quot;<a name='FNanchor_IO_249'></a><a href='#Footnote_IO_249'><sup>[IO]</sup></a> The master of an American ship,
+and all officers in charge of a watch, including the pilots, must be
+American citizens. Since 1871 foreign materials for ship-building have
+been admitted free of duty. Since 1909 such materials, and all articles
+necessary for the outfit and equipment of ships, have been duty-free,
+with this proviso: that vessels receiving these rebates of duties &quot;shall
+not be allowed to engage in the coastwise trade of the United States
+more than six months in any one year,&quot; except upon repayment of the
+duties remitted; and that vessels built for foreign account and
+ownership shall not engage in this trade.<a name='FNanchor_IP_250'></a><a href='#Footnote_IP_250'><sup>[IP]</sup></a></p>
+
+<p>In 1910 the subsidized American service covered only the one
+transatlantic line from New York to Southampton, calling at Plymouth and
+Cherbourg; lines to the north coast of South America&mdash;to Venezuela; to
+Mexico; to Havana; to Jamaica; and on the Pacific, from San Francisco to
+Tahiti.</p>
+
+<p>The total cost of the service for the year on these seven subsidized
+routes was $1,114,603.47, a net excess over the amount allowable at
+present rates to steamers not under <a name='Page_99'></a>contract of $346,677.39, or,
+deducting the amount would have been paid non-contract steamers for the
+despatch of the foreign closed mails which these steamers carry without
+additional cost to the department, a total excess of $293,013.40.<a name='FNanchor_IQ_251'></a><a href='#Footnote_IQ_251'><sup>[IQ]</sup></a>
+&quot;All other mail service between the United States and foreign
+countries,&quot; the postmaster-general regretfully reported, is &quot;wholly
+dependent on steamships over whose sailings the department has no
+control.&quot;<a name='FNanchor_IR_252'></a><a href='#Footnote_IR_252'><sup>[IR]</sup></a></p>
+
+<hr style='width: 45%;' />
+
+<p>The total tonnage of the United States in 1910 as given by Lloyd's was
+5,058,678 tons:</p>
+
+<pre>
+                         No. of vessels.            Tons.
+Sea                                 2774        2,761,605
+Northern Lakes                       606        2,256,619
+Philippine Islands                    89           40,454
+                                    ----        ---------
+    Total                           3469        5,058,678<br />
+</pre>
+
+<p>The number of ships on the lakes as given does not include wooden
+vessels trading on the Great Lakes. While the ocean tonnage has declined
+from more than two and a half million tons in 1861 to some eight hundred
+thousand tons, that engaged in the coastwise and inland trade has
+steadily increased for many years.<a name='FNanchor_IS_253'></a><a href='#Footnote_IS_253'><sup>[IS]</sup></a> On the Great Lakes especially is
+employed a fine and powerful merchant fleet.</p>
+<br />
+
+<p>THE END.</p>
+
+<p>FOOTNOTES:</p>
+
+<a name='Footnote_IN_248'></a><a href='#FNanchor_IN_248'>[IN]</a><div class='note'><p> Registry law of 1792, in Revised Statutes, sec. 4132.</p></div>
+
+<a name='Footnote_IO_249'></a><a href='#FNanchor_IO_249'>[IO]</a><div class='note'><p> Revised Statutes, see. 4131.</p></div>
+
+<a name='Footnote_IP_250'></a><a href='#FNanchor_IP_250'>[IP]</a><div class='note'><p> Tariff act of Aug. 5, 1909, sec. 19.</p></div>
+
+<a name='Footnote_IQ_251'></a><a href='#FNanchor_IQ_251'>[IQ]</a><div class='note'><p> Postoffice Department report, 1910.</p></div>
+
+<a name='Footnote_IR_252'></a><a href='#FNanchor_IR_252'>[IR]</a><div class='note'><p> Postmaster-general Hitchcock, report, 1910.</p></div>
+
+<a name='Footnote_IS_253'></a><a href='#FNanchor_IS_253'>[IS]</a><div class='note'><p> American Year Book, 1911.</p></div>
+
+
+
+<hr style='width: 65%;' />
+<a name='INDEX'></a><h2><a name='Page_100'></a><a name='Page_101'></a>INDEX</h2>
+
+<i>Adriatic</i>, the steamer, <a href='#Page_77'>77</a>, <a href='#Page_78'>78</a><br />
+<br />
+American Shipping League, <a href='#Page_83'>83</a><br />
+<br />
+American Steamship Company, <a href='#Page_23'>23</a>, <a href='#Page_85'>85</a><br />
+<br />
+American Year Book, <i>reference to</i>, <a href='#Page_26'>26</a><br />
+<br />
+Anderson, Com. Gen. George E., <i>reference to</i>, <a href='#Page_68'>68</a><br />
+<br />
+<i>Arctic</i>, the steamer, <a href='#Page_75'>75</a>, <a href='#Page_76'>76</a>, <a href='#Page_77'>77</a><br />
+<br />
+<i>Argentina</i>, use of subsidies in, <a href='#Page_68'>68</a><br />
+<br />
+Aspinwall, W.H., <a href='#Page_73'>73</a>, <a href='#Page_75'>75</a><br />
+<br />
+<i>Atlantic</i>, the steamer, <a href='#Page_75'>75</a>, <a href='#Page_76'>76</a><br />
+<br />
+Atlantic Transport line, <a href='#Page_23'>23</a><br />
+<br />
+<i>Auguste Victoria</i>, the steamer, <a href='#Page_39'>39</a><br />
+<br />
+Australasia line, <a href='#Page_92'>92</a><br />
+<br />
+Australian line, <a href='#Page_38'>38</a>, <a href='#Page_40'>40</a>, <a href='#Page_42'>42</a><br />
+<br />
+Austria-Hungary, history of the use of subsidies in, <a href='#Page_44'>44</a>-<a href='#Page_49'>49</a>;<br />
+<span style='margin-left: 1em;'>provisions for two classes of subsidies in, <a href='#Page_45'>45</a>, <a href='#Page_46'>46</a>;</span><br />
+<span style='margin-left: 1em;'>increase in the proportion of steamers built in, <a href='#Page_46'>46</a>, <a href='#Page_47'>47</a>;</span><br />
+<span style='margin-left: 1em;'>total of tonnage in, <a href='#Page_49'>49</a>;</span><br />
+<span style='margin-left: 1em;'>grants of, <a href='#Page_97'>97</a></span><br />
+<br />
+Austrian Lloyd Company, <a href='#Page_44'>44</a>, <a href='#Page_46'>46</a><br />
+<br />
+Austro-American Shipping Company, <a href='#Page_48'>48</a><br />
+<br />
+Austro-Hungarian Lloyd Company, <i>see</i> Austrian Lloyd Company.<br />
+<br />
+<br />
+BABBITT, VICE CON. GEN. E.G., <i>reference to</i>, <a href='#Page_66'>66</a><br />
+<br />
+<i>Baltic</i>, the steamer, <a href='#Page_75'>75</a>, <a href='#Page_76'>76</a><br />
+<br />
+Barker, J. Ellis, <i>reference to his</i> &quot;Modern Germany,&quot; <a href='#Page_37'>37</a>, <a href='#Page_39'>39</a>-<a href='#Page_41'>41</a>.<br />
+<br />
+Bates, W.W., <i>reference to his</i>, &quot;American Marine,&quot; <a href='#Page_14'>14</a>, <a href='#Page_17'>17</a>, <a href='#Page_20'>20</a>, <a href='#Page_78'>78</a>, <a href='#Page_79'>79</a><br />
+<br />
+Belgium, use of subsidies in, <a href='#Page_42'>42</a>, <a href='#Page_97'>97</a><br />
+<br />
+Bismarck's Memorial to the German Reichstag, <i>reference to</i>, <a href='#Page_50'>50</a><br />
+<br />
+Black Sea Navigation Company, <a href='#Page_61'>61</a><br />
+<br />
+Brazil, use of subventions in, <a href='#Page_68'>68</a><br />
+<br />
+<i>Britannia</i>, the steamer, <a href='#Page_18'>18</a><br />
+<br />
+Brown, James, <a href='#Page_71'>71</a><br />
+<br />
+Brown, Stewart, <a href='#Page_71'>71</a><br />
+<br />
+<br />
+<i>California</i>, the steamer, <a href='#Page_74'>74</a><br />
+<br />
+Canada, granting of mail and steamship subsidies by, <a href='#Page_24'>24</a>, <a href='#Page_25'>25</a><br />
+<br />
+Cargo Ship Bill, the, <a href='#Page_83'>83</a>, <a href='#Page_84'>84</a><br />
+<br />
+Charleston and Havana line, <a href='#Page_74'>74</a><br />
+<br />
+<i>Chargeurs R&eacute;unis</i>, <a href='#Page_36'>36</a><br />
+<br />
+Chile, use of mail subsidies, <a href='#Page_68'>68</a><br />
+<br />
+China, use of subsidies in, <a href='#Page_67'>67</a>, <a href='#Page_98'>98</a><br />
+<br />
+Chinese Merchants' Steam Navigation Company, <a href='#Page_67'>67</a><br />
+<br />
+<i>City of New York</i>, the steamer, <a href='#Page_85'>85</a><br />
+<br />
+<i>City of Paris</i>, the steamer, <a href='#Page_85'>85</a><br />
+<br />
+&quot;Clippers,&quot; American, <a href='#Page_69'>69</a>, <a href='#Page_78'>78</a><br />
+<br />
+Colbert, finance minister of France, <a href='#Page_26'>26</a><br />
+<br />
+Collins, Edward K., <a href='#Page_71'>71</a>, <a href='#Page_72'>72</a>, <a href='#Page_76'>76</a><br />
+<br />
+Collins line, the, <a href='#Page_19'>19</a>, <a href='#Page_20'>20</a>, <a href='#Page_21'>21</a>, <a href='#Page_75'>75</a>-<a href='#Page_78'>78</a><br />
+<br />
+<i>Columbia</i>, the steamer, <a href='#Page_75'>75</a><br />
+<br />
+<i>Campagnie des Messag&eacute;ries Maritimes</i>, <a href='#Page_36'>36</a><br />
+<br />
+<i>Compagnie Fraissant</i>, <a href='#Page_36'>36</a><br />
+<br />
+<i>Compagnie G&eacute;n&eacute;rale Transatlantique</i>, <a href='#Page_36'>36</a><br />
+<br />
+Compa&ntilde;ia Transatlantica Espa&ntilde;ola, La, <a href='#Page_54'>54</a><br />
+<br />
+Cromwell, code of, <i>see</i> Maritime Charter of England, Great,<br />
+<br />
+Cunard, Samuel, <a href='#Page_17'>17</a><br />
+<br />
+Cunard Company, <a href='#Page_19'>19</a>-<a href='#Page_23'>23</a>, <a href='#Page_25'>25</a>, <a href='#Page_71'>71</a>, <a href='#Page_76'>76</a>, <a href='#Page_77'>77</a>, <a href='#Page_92'>92</a>, <a href='#Page_93'>93</a><br />
+<br />
+<i>Cura&ccedil;oa</i>, the steamer, <a href='#Page_16'>16</a><br />
+<br />
+<br />
+DAWSON, GEN. WILLIAM, JR., <i>reference to</i>, <a href='#Page_54'>54</a><br />
+<br />
+Denmark, granting of postal subventions and &quot;trade&quot; subsidies by, <a href='#Page_57'>57</a>, <a href='#Page_97'>97</a><br />
+<br />
+Dominion line, <a href='#Page_23'>23</a><br />
+<br />
+&quot;Dramatic line,&quot; <a href='#Page_76'>76</a><br />
+<br />
+Dutch East Indian lines, <a href='#Page_42'>42</a><br />
+<br />
+<br />
+EAST AFRICAN LINE, <a href='#Page_40'>40</a><br />
+<br />
+East Asian line, <a href='#Page_38'>38</a>, <a href='#Page_40'>40</a>, <a href='#Page_42'>42</a><br />
+<br />
+England, history of the use of subsidies in, <a href='#Page_11'>11</a>-<a href='#Page_25'>25</a>;<br />
+<span style='margin-left: 1em;'>first navigation law of, <a href='#Page_11'>11</a>;</span><br />
+<span style='margin-left: 1em;'>Great Maritime Charter of, <a href='#Page_11'>11</a>-<a href='#Page_15'>15</a>;</span><br />
+<span style='margin-left: 1em;'>Cromwell's code for, <a href='#Page_12'>12</a>;</span><br />
+<span style='margin-left: 1em;'>competition between the United States and, <a href='#Page_14'>14</a>, <a href='#Page_19'>19</a>, <a href='#Page_20'>20</a>;</span><br />
+<span style='margin-left: 1em;'>testing of steam for navigation in, <a href='#Page_15'>15</a>, <a href='#Page_16'>16</a>;</span><br />
+<span style='margin-left: 1em;'>building of steamships, <a href='#Page_16'>16</a>-<a href='#Page_24'>24</a>;</span><br />
+<span style='margin-left: 1em;'>total of subsidies paid in, <a href='#Page_25'>25</a>;</span><br />
+<span style='margin-left: 1em;'>grants of, <a href='#Page_97'>97</a></span><br />
+<br />
+<br />
+<i>Falcon</i>, the steamer, <a href='#Page_74'>74</a>, <a href='#Page_75'>75</a><br />
+<br />
+Farquhar, James M., <a href='#Page_83'>83</a><br />
+<br />
+France, history of the use of subsidies in, <a href='#Page_26'>26</a>-<a href='#Page_36'>36</a>;<br />
+<span style='margin-left: 1em;'>the navigation laws of, <a href='#Page_26'>26</a>;</span><br />
+<span style='margin-left: 1em;'>the disappearance of the domestic mercantile marine of, <a href='#Page_27'>27</a>;</span><br />
+<span style='margin-left: 1em;'>commercial treaty between England and, <a href='#Page_28'>28</a>;</span><br />
+<a name='Page_102'></a><span style='margin-left: 1em;'>the Merchant Marine Act of, <a href='#Page_29'>29</a>-<a href='#Page_35'>35</a>;</span><br />
+<span style='margin-left: 1em;'>organization of steamship companies in, <a href='#Page_30'>30</a>-<a href='#Page_32'>32</a>;</span><br />
+<span style='margin-left: 1em;'>granting of &quot;shipping premiums&quot; in, <a href='#Page_32'>32</a>;</span><br />
+<span style='margin-left: 1em;'>total cost of bounty system in, <a href='#Page_35'>35</a>;</span><br />
+<span style='margin-left: 1em;'>capacity of, for building steamships, <a href='#Page_36'>36</a>;</span><br />
+<span style='margin-left: 1em;'>grants of, <a href='#Page_97'>97</a></span><br />
+<br />
+<i>Franklin</i>, the steamer, <a href='#Page_74'>74</a>, <a href='#Page_78'>78</a><br />
+<br />
+Frye, William P., <a href='#Page_83'>83</a>, <a href='#Page_87'>87</a><br />
+<br />
+<br />
+GAFFNEY, T. ST. J., U.S. Consul, <a href='#Page_52'>52</a><br />
+<br />
+Gallinger, Jacob H., <a href='#Page_87'>87</a>, <a href='#Page_91'>91</a>, <a href='#Page_92'>92</a>, <a href='#Page_94'>94</a>, <a href='#Page_95'>95</a><br />
+<br />
+<i>Georgia</i>, the steamer, <a href='#Page_75'>75</a><br />
+<br />
+German-Australian line, <a href='#Page_42'>42</a><br />
+<br />
+Germany, history of the use of subsidies in, <a href='#Page_37'>37</a>-<a href='#Page_41'>41</a>;<br />
+<span style='margin-left: 1em;'>first steps in domestic shipbuilding in, <a href='#Page_37'>37</a>;</span><br />
+<span style='margin-left: 1em;'>establishment of a subsidized mail service in, <a href='#Page_38'>38</a>;</span><br />
+<span style='margin-left: 1em;'>building of large steamships in, <a href='#Page_39'>39</a>;</span><br />
+<span style='margin-left: 1em;'>extraordinary growth of the merchant marine in, <a href='#Page_40'>40</a>, <a href='#Page_41'>41</a>;</span><br />
+<span style='margin-left: 1em;'>grants of, <a href='#Page_97'>97</a></span><br />
+<br />
+<i>Great Britain</i>, the steamer, <a href='#Page_18'>18</a><br />
+<br />
+<i>Great Western</i>, the steamer, <a href='#Page_16'>16</a>, <a href='#Page_17'>17</a><br />
+<br />
+Great Western Steamship Company, <a href='#Page_17'>17</a>, <a href='#Page_18'>18</a><br />
+<br />
+Green, John R., <i>reference to his</i> &quot;Short History of the English People,&quot; <a href='#Page_11'>11</a>, <a href='#Page_13'>13</a><br />
+<br />
+Greener, Gen. R.T., U.S. Con., <i>reference to</i>, <a href='#Page_60'>60</a><br />
+<br />
+Grosvenor, Charles H., <a href='#Page_91'>91</a>-<a href='#Page_93'>93</a><br />
+<br />
+<br />
+HAMBURG-AMERICAN lines, <a href='#Page_22'>22</a>, <a href='#Page_39'>39</a>, <a href='#Page_40'>40</a><br />
+<br />
+Hanna, Mark, <a href='#Page_86'>86</a><br />
+<br />
+Harris, Arnold, <a href='#Page_72'>72</a>, <a href='#Page_73'>73</a><br />
+<br />
+<i>Hermann</i>, the steamer, <a href='#Page_73'>73</a><br />
+<br />
+Hitchcock, Postmaster-General, <i>reference to</i> Report of, <a href='#Page_99'>99</a><br />
+<br />
+Hoar, George Frisbie, <a href='#Page_79'>79</a><br />
+<br />
+Holland, maritime supremacy of, <a href='#Page_12'>12</a>, <a href='#Page_13'>13</a>, <a href='#Page_26'>26</a>, <a href='#Page_42'>42</a>;<br />
+<span style='margin-left: 1em;'>granting of subventions for carrying mails in, <a href='#Page_42'>42</a></span><br />
+<br />
+<i>Humboldt</i>, the steamer, <a href='#Page_74'>74</a>, <a href='#Page_78'>78</a><br />
+<br />
+Hungary, <i>see</i> Austria-Hungary<br />
+<br />
+<br />
+<i>Illinois</i>, the steamer, <a href='#Page_23'>23</a>, <a href='#Page_75'>75</a><br />
+<br />
+<i>Indiana</i>, the steamer, <a href='#Page_23'>23</a><br />
+<br />
+Inman, John, <a href='#Page_20'>20</a><br />
+<br />
+&quot;Inman Line,&quot; <a href='#Page_20'>20</a>-<a href='#Page_23'>23</a>, <a href='#Page_85'>85</a><br />
+<br />
+&quot;International Mercantile Marine Company,&quot; <a href='#Page_23'>23</a>, <a href='#Page_24'>24</a><br />
+<br />
+International Navigation Company, <i>see</i> American Line<br />
+<br />
+Italian General Navigation Company, <a href='#Page_53'>53</a><br />
+<br />
+Italy, history of the use of subsidies in, <a href='#Page_50'>50</a>-<a href='#Page_53'>53</a>;<br />
+<span style='margin-left: 1em;'>construction, subsidies provided for in, <a href='#Page_50'>50</a>-<a href='#Page_52'>52</a>;</span><br />
+<span style='margin-left: 1em;'>mail subvention system of, <a href='#Page_52'>52</a>, <a href='#Page_53'>53</a>;</span><br />
+<span style='margin-left: 1em;'>increase of tonnage in, <a href='#Page_53'>53</a>;</span><br />
+<span style='margin-left: 1em;'>grants of, <a href='#Page_97'>97</a></span><br />
+<br />
+<br />
+JAPAN, history of the use of subsidies in, <a href='#Page_63'>63</a>-<a href='#Page_67'>67</a>, <a href='#Page_98'>98</a><br />
+<br />
+Japan Mail Steamship Company, <i>see, Nippon Yusen Kaisha</i>, the<br />
+<br />
+Japan Year Book, <i>reference to</i>, <a href='#Page_66'>66</a>, <a href='#Page_67'>67</a><br />
+<br />
+Jwasaki Yataro, the Japanese merchant, <a href='#Page_63'>63</a><br />
+<br />
+<br />
+LAW, GEORGE, <a href='#Page_72'>72</a><br />
+<br />
+Lindsay, W.H., <i>reference to his</i> &quot;History of Merchant Shipping,&quot; <a href='#Page_11'>11</a>, <a href='#Page_12'>12</a>, <a href='#Page_14'>14</a>, <a href='#Page_18'>18</a>-<a href='#Page_20'>20</a>, <a href='#Page_27'>27</a>-<a href='#Page_29'>29</a>;<br />
+<span style='margin-left: 1em;'><i>also his</i>, &quot;Our Navigation Laws,&quot; <a href='#Page_12'>12</a></span><br />
+<br />
+<i>Lloyd Brazileiro</i>, the, <a href='#Page_68'>68</a><br />
+<br />
+Lloyd Italiano line, <a href='#Page_53'>53</a><br />
+<br />
+Lloyd's Register, <i>reference to</i>, <a href='#Page_25'>25</a>, <a href='#Page_36'>36</a>, <a href='#Page_41'>41</a>, <a href='#Page_42'>42</a>, <a href='#Page_49'>49</a>, <a href='#Page_53'>53</a>, <a href='#Page_56'>56</a>-<a href='#Page_58'>58</a>, <a href='#Page_61'>61</a>, <a href='#Page_67'>67</a><br />
+<br />
+<i>Lusitania</i>, the steamer, <a href='#Page_24'>24</a><br />
+<br />
+Lynch, John, <a href='#Page_81'>81</a><br />
+<br />
+Lynch bounty bill, <a href='#Page_81'>81</a><br />
+<br />
+<br />
+MACGREGOR, JOHN, <i>reference to his</i>, &quot;Commercial Tariffs,&quot; <a href='#Page_14'>14</a><br />
+<br />
+Mellvaine, Bowes, <a href='#Page_72'>72</a><br />
+<br />
+Mail Ship Bill, the <a href='#Page_83'>83</a>, <a href='#Page_84'>84</a><br />
+<br />
+Maritime Charter of England, Great, <a href='#Page_11'>11</a>-<a href='#Page_15'>15</a><br />
+<br />
+Marvin, Winthrop L., <i>reference to his</i> &quot;American Merchant Marine,&quot; <a href='#Page_19'>19</a>, <a href='#Page_69'>69</a>, <a href='#Page_76'>76</a>, <a href='#Page_78'>78</a>, <a href='#Page_79'>79</a>, <a href='#Page_84'>84</a>, <a href='#Page_86'>86</a><br />
+<br />
+<i>Mauretania</i>, the steamer, <a href='#Page_24'>24</a><br />
+<br />
+Meeker, Royal, <i>reference to his</i> &quot;History of Ship Subsidies,&quot; <a href='#Page_11'>11</a>, <a href='#Page_13'>13</a>, <a href='#Page_17'>17</a>, <a href='#Page_18'>18</a>, <a href='#Page_20'>20</a>, <a href='#Page_21'>21</a>, <a href='#Page_23'>23</a>, <a href='#Page_29'>29</a>-<a href='#Page_36'>36</a>, <a href='#Page_39'>39</a>, <a href='#Page_40'>40</a>, <a href='#Page_42'>42</a>-<a href='#Page_45'>45</a>, <a href='#Page_47'>47</a>, <a href='#Page_48'>48</a>, <a href='#Page_50'>50</a>-<a href='#Page_53'>53</a>, <a href='#Page_55'>55</a>-<a href='#Page_57'>57</a>, <a href='#Page_59'>59</a>, <a href='#Page_62'>62</a>-<a href='#Page_65'>65</a>, <a href='#Page_68'>68</a>, <a href='#Page_71'>71</a>-<a href='#Page_75'>75</a>, <a href='#Page_77'>77</a>, <a href='#Page_78'>78</a>, <a href='#Page_83'>83</a><br />
+<br />
+Merchant Marine Commission, the, <a href='#Page_87'>87</a>-<a href='#Page_90'>90</a><br />
+<br />
+Miller, Con. Gen. H.B., <i>reference to</i>, <a href='#Page_65'>65</a><br />
+<br />
+Mills, Edward, <a href='#Page_71'>71</a><br />
+<br />
+Mordecai, M.C., <a href='#Page_73'>73</a><br />
+<br />
+Morgan, J. Pierpont, <a href='#Page_23'>23</a><br />
+<br />
+&quot;Morgan Steamship Merger,&quot; <i>see</i> &quot;International Mercantile Marine Company&quot;<br />
+<br />
+<br />
+NAVIGATION, Report of (U.S.) commissioner of, <i>reference to</i>, <a href='#Page_24'>24</a><br />
+<br />
+Navigation law, first English, <a href='#Page_11'>11</a>, <a href='#Page_13'>13</a><br />
+<br />
+New Orleans packet line, <a href='#Page_76'>76</a><br />
+<br />
+New York, Havre, and Bremen line, <a href='#Page_19'>19</a>, <a href='#Page_70'>70</a>, <a href='#Page_73'>73</a>, <a href='#Page_78'>78</a><br />
+<br />
+New York and Chagres line, <a href='#Page_74'>74</a>, <a href='#Page_75'>75</a><br />
+<br />
+<i>Nippon Yusen Kaisha</i>, the, <a href='#Page_63'>63</a>, <a href='#Page_65'>65</a>, <a href='#Page_67'>67</a><br />
+<br />
+North German Lloyd line, <a href='#Page_21'>21</a>, <a href='#Page_22'>22</a>, <a href='#Page_38'>38</a>-<a href='#Page_40'>40</a>, <a href='#Page_42'>42</a><br />
+<br /><a name='Page_103'></a>
+Norway, granting of subsidies for mail carriage by, <a href='#Page_57'>57</a>, <a href='#Page_58'>58</a>, <a href='#Page_98'>98</a><br />
+<br />
+<br />
+O'BRIEN; THOMAS, U.S. Ambassador, <i>reference to</i>, <a href='#Page_67'>67</a><br />
+<br />
+Ocean Steam Navigation Company, <a href='#Page_71'>71</a><br />
+<br />
+<i>Ohio</i>, the steamer, <a href='#Page_23'>23</a>, <a href='#Page_75'>75</a><br />
+<br />
+<i>Olympic</i>, the steamer, <a href='#Page_24'>24</a><br />
+<br />
+<i>Oregon</i>, the steamer, <a href='#Page_74'>74</a><br />
+<br />
+<br />
+<i>Pacific</i>, the steamer, <a href='#Page_75'>75</a>-<a href='#Page_77'>77</a><br />
+<br />
+Pacific Mail Steamship Company, <a href='#Page_73'>73</a>-<a href='#Page_75'>75</a>, <a href='#Page_80'>80</a>, <a href='#Page_82'>82</a>, <a href='#Page_83'>83</a><br />
+<br />
+Pacific Steam Navigation Company, <a href='#Page_19'>19</a><br />
+<br />
+<i>Panama</i>, the steamer, <a href='#Page_74'>74</a><br />
+<br />
+Parliamentary papers, <i>reference to</i>, <a href='#Page_22'>22</a><br />
+<br />
+<i>Pennsylvania</i>, the steamer, <a href='#Page_23'>23</a><br />
+<br />
+Portugal, granting of postal subventions and subsidies by, <a href='#Page_56'>56</a>, <a href='#Page_97'>97</a><br />
+<br />
+Postal Aid Law, the, <a href='#Page_83'>83</a>, <a href='#Page_87'>87</a>, <a href='#Page_88'>88</a><br />
+<br />
+Postal Ocean Steamship Company, <a href='#Page_35'>35</a>, <a href='#Page_36'>36</a><br />
+<br />
+Preble, George H., <i>reference to his</i>, &quot;Chronological History of Steam Navigation,&quot; <a href='#Page_16'>16</a>, <a href='#Page_17'>17</a>, <a href='#Page_19'>19</a><br />
+<br />
+<i>Princeton</i>, sloop-of-war, the, <a href='#Page_19'>19</a><br />
+<br />
+<br />
+RED STAR LINE, <a href='#Page_23'>23</a><br />
+<br />
+Ricardo, John Lewis, <i>reference to his</i>, &quot;Anatomy of the Navigation Laws,&quot; <a href='#Page_12'>12</a>, <a href='#Page_13'>13</a><br />
+<br />
+Roach, John, <a href='#Page_83'>83</a><br />
+<br />
+Roberts, Marshall O., <a href='#Page_72'>72</a><br />
+<br />
+Roosevelt, President, <a href='#Page_87'>87</a>, <a href='#Page_93'>93</a>, <a href='#Page_94'>94</a><br />
+<br />
+Root, Secretary, <a href='#Page_93'>93</a><br />
+<br />
+Royal Mail Steam Packet Company, <a href='#Page_19'>19</a><br />
+<br />
+<i>Royal William</i>, the steamer, <a href='#Page_16'>16</a><br />
+<br />
+Russia, history of the use of subsidies in, <a href='#Page_59'>59</a>-<a href='#Page_62'>62</a>;<br />
+<span style='margin-left: 1em;'>proposed granting of bounties in the form of loans, <a href='#Page_60'>60</a>, <a href='#Page_61'>61</a>;</span><br />
+<span style='margin-left: 1em;'>increase in the fleet of, <a href='#Page_61'>61</a>;</span><br />
+<span style='margin-left: 1em;'>grants of, <a href='#Page_98'>98</a></span><br />
+<br />
+Russian Volunteer Fleet, <a href='#Page_61'>61</a><br />
+<br />
+<br />
+ST. GEORGE'S PACKET COMPANY, <a href='#Page_17'>17</a><br />
+<br />
+<i>St. Louis</i>, the steamer, <a href='#Page_86'>86</a><br />
+<br />
+<i>St. Paul</i>, the steamer, <a href='#Page_86'>86</a><br />
+<br />
+Sammons, Thomas, U.S. Con. Gen., <a href='#Page_66'>66</a><br />
+<br />
+<i>Savannah</i>, the first steamer to cross the Atlantic, <a href='#Page_16'>16</a><br />
+<br />
+Shipbuilding, in the United States, <a href='#Page_14'>14</a>-<a href='#Page_72'>72</a>;<br />
+<span style='margin-left: 1em;'>in England, <a href='#Page_15'>15</a>-<a href='#Page_24'>24</a>;</span><br />
+<span style='margin-left: 1em;'>in France, <a href='#Page_28'>28</a>, <a href='#Page_30'>30</a>;</span><br />
+<span style='margin-left: 1em;'>in Germany, <a href='#Page_37'>37</a>, <a href='#Page_39'>39</a>, <a href='#Page_40'>40</a>, <a href='#Page_41'>41</a>;</span><br />
+<span style='margin-left: 1em;'>in Austria-Hungary, <a href='#Page_46'>46</a>, <a href='#Page_47'>47</a>;</span><br />
+<span style='margin-left: 1em;'>in Spain, <a href='#Page_55'>55</a>, <a href='#Page_56'>56</a>;</span><br />
+<span style='margin-left: 1em;'>in Russia, <a href='#Page_61'>61</a>;</span><br />
+<span style='margin-left: 1em;'>in Japan, <a href='#Page_64'>64</a>;</span><br />
+<span style='margin-left: 1em;'>in the United States, <a href='#Page_70'>70</a>-<a href='#Page_78'>78</a>, <a href='#Page_89'>89</a></span><br />
+<br />
+<i>Sirius</i>, the steamer, <a href='#Page_16'>16</a>, <a href='#Page_17'>17</a><br />
+<br />
+Sloo, A.G., <a href='#Page_71'>71</a>, <a href='#Page_72'>72</a><br />
+<br />
+Skinner, Robert, U.S. Consul, <a href='#Page_31'>31</a>, <a href='#Page_41'>41</a>.<br />
+<br />
+Small, Consul General, <i>reference to</i>, <a href='#Page_25'>25</a><br />
+<br />
+Smith, U.S. Consul, <i>reference to</i>, <a href='#Page_59'>59</a><br />
+<br />
+Snodgrass, Con. Gen. John H., <i>reference to</i>, <a href='#Page_61'>61</a><br />
+<br />
+South America, use of subsidies in, <a href='#Page_68'>68</a>, <a href='#Page_98'>98</a><br />
+<br />
+Spain, history of the use of subsidies in, <a href='#Page_54'>54</a>-<a href='#Page_56'>56</a>, <a href='#Page_97'>97</a><br />
+<br />
+Spears, John R., <i>reference to his</i> &quot;Story of the American Merchant Marine,&quot; <a href='#Page_19'>19</a>, <a href='#Page_76'>76</a><br />
+<br />
+Subsidy, definition of term, <a href='#Page_9'>9</a>;<br />
+<span style='margin-left: 1em;'>various forms of, <a href='#Page_9'>9</a>;</span><br />
+<span style='margin-left: 1em;'>use of, in England, <a href='#Page_11'>11</a>-<a href='#Page_25'>25</a>;</span><br />
+<span style='margin-left: 1em;'>in Canada, <a href='#Page_24'>24</a>, <a href='#Page_25'>25</a>;</span><br />
+<span style='margin-left: 1em;'>in France, <a href='#Page_26'>26</a>-<a href='#Page_36'>36</a>;</span><br />
+<span style='margin-left: 1em;'>in Germany, <a href='#Page_37'>37</a>-<a href='#Page_41'>41</a>;</span><br />
+<span style='margin-left: 1em;'>in Holland and Belgium, <a href='#Page_42'>42</a>, <a href='#Page_43'>43</a>;</span><br />
+<span style='margin-left: 1em;'>in Austria-Hungary, <a href='#Page_44'>44</a>-<a href='#Page_49'>49</a>;</span><br />
+<span style='margin-left: 1em;'>in Italy, <a href='#Page_50'>50</a>-<a href='#Page_53'>53</a>;</span><br />
+<span style='margin-left: 1em;'>in Spain, <a href='#Page_54'>54</a>-<a href='#Page_56'>56</a>;</span><br />
+<span style='margin-left: 1em;'>in Portugal, <a href='#Page_56'>56</a>;</span><br />
+<span style='margin-left: 1em;'>in Denmark, Norway, and Sweden, <a href='#Page_57'>57</a>, <a href='#Page_58'>58</a>;</span><br />
+<span style='margin-left: 1em;'>in Russia, <a href='#Page_59'>59</a>-<a href='#Page_62'>62</a>;</span><br />
+<span style='margin-left: 1em;'>in Japan, <a href='#Page_63'>63</a>-<a href='#Page_67'>67</a>;</span><br />
+<span style='margin-left: 1em;'>in China, <a href='#Page_67'>67</a>;</span><br />
+<span style='margin-left: 1em;'>in South America, <a href='#Page_68'>68</a>;</span><br />
+<span style='margin-left: 1em;'>in the United States, <a href='#Page_69'>69</a>-<a href='#Page_96'>96</a>;</span><br />
+<span style='margin-left: 1em;'>summary of, <a href='#Page_97'>97</a>-<a href='#Page_99'>99</a></span><br />
+<br />
+Sweden, granting of subsidies for mail carriage by, <a href='#Page_57'>57</a>, <a href='#Page_58'>58</a>, <a href='#Page_97'>97</a><br />
+<br />
+<br />
+TAFT, PRESIDENT, <a href='#Page_94'>94</a>, <a href='#Page_95'>95</a><br />
+<br />
+<i>Tennessee</i>, the steamer, <a href='#Page_75'>75</a><br />
+<br />
+<br />
+UNION MARITIME COMPANY, <a href='#Page_35'>35</a><br />
+<br />
+United States, competition in the overseas between England and the, <a href='#Page_14'>14</a>;<br />
+<span style='margin-left: 1em;'>history of the proposed system of ship subsidies in the, <a href='#Page_69'>69</a>-<a href='#Page_96'>96</a>;</span><br />
+<span style='margin-left: 1em;'>establishment of mail steamers in the, <a href='#Page_70'>70</a>-<a href='#Page_78'>78</a>;</span><br />
+<span style='margin-left: 1em;'>the &quot;clippers&quot; of the, <a href='#Page_78'>78</a>;</span><br />
+<span style='margin-left: 1em;'>revival of the steamship-subsidizing policy in the, <a href='#Page_79'>79</a>, <a href='#Page_80'>80</a>;</span><br />
+<span style='margin-left: 1em;'>condition of the merchant marine in the, <a href='#Page_80'>80</a>;</span><br />
+<span style='margin-left: 1em;'>bills in Congress relative to bounties in the, <a href='#Page_81'>81</a>-<a href='#Page_96'>96</a>;</span><br />
+<span style='margin-left: 1em;'>grants of the, <a href='#Page_98'>98</a>;</span><br />
+<span style='margin-left: 1em;'>ownership of ships in the, <a href='#Page_98'>98</a>;</span><br />
+<span style='margin-left: 1em;'>subsidized service of, in 1911, <a href='#Page_98'>98</a>;</span><br />
+<span style='margin-left: 1em;'>total tonnage of the, <a href='#Page_99'>99</a></span><br />
+<br />
+<br />
+VAN TROMP, the Dutch admiral, <a href='#Page_13'>13</a><br />
+<br />
+Vera Cruz packet line, <a href='#Page_76'>76</a><br />
+<br />
+Viallat&eacute;s, Achille, <i>reference to</i>, <a href='#Page_28'>28</a>-<a href='#Page_30'>30</a>, <a href='#Page_32'>32</a>-<a href='#Page_36'>36</a><br />
+<br />
+<br />
+<i>Washington</i>, the steamer, <a href='#Page_73'>73</a><br />
+<br />
+Wells, David A., <i>reference to his</i> &quot;Our Merchant Marine,&quot; <a href='#Page_11'>11</a>, <a href='#Page_20'>20</a>, <a href='#Page_29'>29</a>, <a href='#Page_30'>30</a>, <a href='#Page_38'>38</a>, <a href='#Page_69'>69</a><br />
+<br />
+Wheelwright, William, <a href='#Page_19'>19</a><br />
+<br />
+White Star Line, <a href='#Page_23'>23</a>, <a href='#Page_24'>24</a><br />
+<br />
+Wood, J.K., U.S. Consul, <i>reference to</i>, <a href='#Page_52'>52</a>
+<br>
+<br>
+<br>
+<hr class="pg" noshade>
+<p>***END OF THE PROJECT GUTENBERG EBOOK MANUAL OF SHIP SUBSIDIES***</p>
+<p>******* This file should be named 13718-h.txt or 13718-h.zip *******</p>
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+</pre>
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+</html>
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+The Project Gutenberg eBook, Manual of Ship Subsidies, by Edwin M. Bacon
+
+
+This eBook is for the use of anyone anywhere at no cost and with
+almost no restrictions whatsoever.  You may copy it, give it away or
+re-use it under the terms of the Project Gutenberg License included
+with this eBook or online at www.gutenberg.org
+
+
+
+
+
+Title: Manual of Ship Subsidies
+
+Author: Edwin M. Bacon
+
+Release Date: October 11, 2004  [eBook #13718]
+
+Language: English
+
+Character set encoding: ISO-646-US (US-ASCII)
+
+
+***START OF THE PROJECT GUTENBERG EBOOK MANUAL OF SHIP SUBSIDIES***
+
+
+E-text prepared by Audrey Longhurst and the Project Gutenberg Online
+Distributed Proofreading Team
+
+
+
+MANUAL OF SHIP SUBSIDIES
+
+An Historical Summary of the Systems of All Nations
+
+by
+
+EDWIN M. BACON, A.M.
+
+1911
+
+
+
+
+
+
+
+CONTENTS
+
+CHAPTER
+
+        PREFACE
+I       INTRODUCTORY
+II      GREAT BRITAIN
+III     FRANCE
+IV      GERMANY
+V       HOLLAND-BELGIUM
+VI      AUSTRIA-HUNGARY
+VII     ITALY
+VIII    SPAIN-PORTUGAL
+IX      DENMARK-NORWAY-SWEDEN
+X       RUSSIA
+XI      JAPAN-CHINA
+XII     SOUTH AMERICA
+XIII    THE UNITED STATES
+XIV     SUMMARY
+        INDEX
+
+
+
+
+PREFACE
+
+
+The intent of this little book is to furnish in compact form the history
+of the development of the ship subsidies systems of the maritime nations
+of the world, and an outline of the present laws or regulations of those
+nations. It is a manual of facts and not of opinions. The author's aim
+has been to present impartially the facts as they appear, without color
+or prejudice, with a view to providing a practical manual of information
+and ready reference. He has gathered the material from documentary
+sources as far as practicable, and from recognized authorities, American
+and foreign, on the general history of the rise and progress of the
+mercantile marine of the world as well as on the special topic of ship
+subsidies. These sources and authorities are named in the footnotes, and
+volume and page given so that reference can easily be made to them for
+details impossible to give in the contracted space to which this manual
+is necessarily confined.
+
+                                              E.M.B.
+
+  BOSTON, MASS.
+  September 1, 1911.
+
+
+
+
+
+
+CHAPTER I
+
+INTRODUCTORY
+
+
+The term _subsidy_, defined in the dictionaries as a Government grant in
+aid of a commercial enterprise, is given different shadings of meaning
+in different countries. In all, however, except Great Britain, it is
+broadly accepted as equivalent to a bounty, or a premium, open or
+concealed, directly or indirectly paid by Government to individuals or
+companies for the encouragement or fostering of the trade or commerce of
+the nation granting it.
+
+Ship subsidies are in various forms: premiums on construction of
+vessels; navigation bounties; trade bounties; fishing bounties; postal
+subsidies for the carriage of ocean mails; naval subventions; Government
+loans on low rates of interest.
+
+In Great Britain they comprise postal subsidies and naval subventions,
+ostensibly payments for oversea and colonial mail service exclusively,
+or compensation for such construction of merchant ships under the
+Admiralty regulations as will make them at once available for service as
+armed cruisers and transports. They are assumed to be not bounties in
+excess of the actual value of the service performed, with the real
+though concealed object of fostering the development of British overseas
+navigation. Still, notwithstanding this assumption, such has been their
+practical effect.
+
+Their original objects when first applied to steamship service, as
+defined by a Parliamentary committee in 1853, were--"to afford us rapid,
+frequent, and punctual communications with distant ports which feed the
+main arteries of British commerce, and with the most important of our
+foreign possessions; to foster maritime enterprise; and to encourage the
+production of a superior class of vessels, which would promote the
+convenience and wealth of the country in time of peace, and assist in
+defending its shores against hostile aggression." To foster British
+commerce they have undeniably been employed to meet and check foreign
+competition on the seas, as the record shows.
+
+In the United States they have taken the form of postal subsidies openly
+granted for the two-fold purpose of the transportation of the ocean
+mails in American-built and American-owned ships, and the encouragement
+of American shipbuilding and ship-using.
+
+
+
+
+CHAPTER II
+
+GREAT BRITAIN
+
+
+England has never granted general ship-construction or navigation
+bounties except in the reigns of Elizabeth and James I. Under Elizabeth
+Parliament offered a bounty of five shillings per ton to every ship
+above one hundred tons burden; and under James I that law was revived,
+with the bounty applying only to vessels of two hundred tons or over.[A]
+
+A policy of Government favoritism to shipping, however, began far back
+in the dim ninth century with Alfred the Great. Under the inspiration of
+this Saxon of many virtues, his people increased the number of English
+merchant vessels and laid the foundation for the creation and
+maintenance of a royal navy.[B] The Saxon Athelstan, Alfred's grandson,
+whose attention to commerce was also marked, first made it a way to
+honor, one of his laws enacting that a merchant or mariner successfully
+accomplishing three voyages on the high seas with a ship and a cargo of
+his own should be advanced to the dignity of a thane (baron).[C]
+
+The first navigation law was enacted in the year 1381, fifth of Richard
+II. This act, introduced "to awaken industry and increase the wealth of
+the inhabitants and extend their influence,"[D] ordained that "none of
+the King's liege people should from henceforth ship any merchandise in
+going out or coming within the realm of England but only in the ships of
+the King's liegeance, on penalty of forfeiture of vessel and cargo."[E]
+
+This act of Richard II was the forerunner of the code of Cromwell, which
+came to be called the "Great Maritime Charter of England," and the
+fundamental principles of which held up to the second quarter of the
+nineteenth century.
+
+Under Charles I was enacted (1646) the first restrictive act with
+relation to the commerce of the colonies, which ordained "That none in
+any of the ports of the plantations of Virginia, Bermuda, Barbados, and
+other places of America, shall suffer any ship or vessel to lade any
+goods of the growth of the plantations and carry them to foreign ports
+except in English bottoms," under forfeiture of certain exemptions from
+customs.[F] It was followed up four years later (1650) under the
+Commonwealth, by an act prohibiting "all foreign vessels whatever from
+lading with the plantations of America without having obtained a
+license."[G]
+
+Cromwell's code, of which the act of 1381 was the germ, was established
+the next year, 1651. Its primary object was to check the maritime
+supremacy of Holland, then attaining dominance of the sea; and to strike
+a decisive blow at her naval power. The ultimate aim was to secure to
+England the whole carrying trade of the world, Europe only excepted.[H]
+These were its chief provisions: that no goods or commodities whatever
+of the growth, production, or manufacture of Asia, Africa, or America
+should be imported either into England or Ireland, or any of the
+plantations, except in English-built ships, owned by English subjects,
+navigated by English masters, and of which three-fourths of the crew
+were Englishmen; or in such ships as were the real property of the
+people of the country or place in which the goods were produced, or from
+which they could only be, or most usually were, exported.[I] This last
+clause was the blow direct to Holland, for the Dutch had little native
+products to export, and their ships were mainly employed in carrying the
+produce of other countries to all foreign markets. It was answered with
+war, the fierce naval war of 1652-1654, in which was exhibited that
+famous spectacle of the at first victorious Dutch admiral, Van Tromp,
+sweeping the English Channel with a broom at his masthead.
+
+With the final defeat of the Dutch after hard fighting on both sides,
+their virtual submission to the English Navigation Act, and their
+admission of the English "sovereignty of the seas,"[J] by their consent
+to "strike their flag to the shipping of the Commonwealth," England, in
+her turn, became the chief sea power of the world.[K] During the ten
+years of peace that followed, however, the Dutch despite the English
+Navigation Act, succeeded in increasing their shipping, and regained
+much of the carrying trade if not their lost leadership.[L]
+
+Cromwell's act was confirmed by Charles II in 1660, and made the basis
+of the code which then her statesmen exalted as "The Great Maritime
+Charter of England."
+
+Early in Charles II's reign also (in 1662) indirect bounties were
+offered for the encouragement of the building of larger and more
+efficient ships for service in time of war. These were grants of
+one-tenth of the customs dues on the cargo, for two years, to every
+vessel having two and one-half or three decks, and carrying thirty
+guns.[M] Thirty years later (1694), in William and Mary's reign, the
+time was extended to three years. Under William and Mary the granting of
+bounties on naval stores was begun, and this system was continued till
+George III's time.[M] With William and Mary's reign also began the
+giving of indirect bounties to fishermen for the catching and curing of
+fish. After the middle of the eighteenth century vessels engaged in the
+fisheries were regularly subsidized, with the object of training sailors
+for the merchant marine and the royal navy.[M]
+
+While the fundamental rules of the "Maritime Charter" of 1660 remained
+practically unimpaired, although in the succeeding years hundreds of
+regulating statutes were passed, breaks were made in the restrictive
+barriers of the code during the first third of the nineteenth century by
+the adoption of the principle of maritime reciprocity.[N] In 1815 (July
+3) a convention establishing a "reciprocal liberty of commerce," between
+the "territories of Great Britain in Europe and those of the United
+States," was signed in London.[O] In 1824-1826 reciprocity treaties were
+entered into with various continental powers. In 1827 (August 6) the
+treaty of 1815 with the United States was renewed. In 1830 a treaty for
+regulating the commercial intercourse between the British colonial
+possessions and the United States was executed.[P] Under these
+conventions, repeatedly interrupted by British Orders in Council and by
+Presidents' proclamations,[Q] the trading intercourse between both
+countries was regulated till the abrogation of the code of 1660.
+
+In 1844 an indirect move against the code was made, with the appointment
+of a committee of the House of Commons to inquire into the working of
+the reciprocal treaties and the condition of the mercantile marine of
+the country.[R]
+
+At this period the competition of the United States in the overseas
+carrying trade of the world was hard pressing England. The Americans
+were building the best wooden ships, superior in model and
+seaworthiness, the fastest sailers. They were leading in shipbuilding.
+Much of the British shipping trade was carried on in American-built
+vessels. The splendid American clipper ships were almost monopolizing
+the carrying trade between Great Britain and the United States. Most of
+the shipping of the world was yet in wooden bottoms. Iron ships were in
+service, but iron-shipbuilding was in its infancy.
+
+The Parliamentary inquiry of 1844 was followed up in 1847 with a move
+openly against the ancient code. Its principles as they then stood,
+essentially as in 1660, despite the multitude of regulating statutes,
+are thus enumerated:
+
+     1. Certain named articles of European produce could only be
+     imported into the United Kingdom for consumption in British
+     ships, or in ships of the country of which the goods were the
+     produce, or of the country from which they were usually imported.
+
+     2. No produce of Asia, Africa, or America could be imported for
+     consumption into the United Kingdom from Europe in any ships; and
+     such produce could only be imported from any other place in
+     British ships, or in ships of the country of which the goods were
+     the produce and from which they were usually imported.
+
+     3. No goods could be carried coastwise from one part of the
+     United Kingdom to another in any but British ships.
+
+     4. No goods could be exported from the United Kingdom to any of
+     the British possessions in Asia, Africa, or America (with some
+     exceptions with regard to India) in any but British ships.
+
+     5. No goods could be carried from any one British possession in
+     Asia, Africa, or America, to another, nor from one part of such
+     possession to another part of the same, in any but British ships.
+
+     6. No goods could be imported into any British possession in
+     Asia, Africa, or America in any but British ships, or in ships of
+     the country of which the goods were the produce; provided, also,
+     that such ships brought the goods from that country.
+
+     7. No foreign ships were allowed to trade with any of the British
+     possessions unless they had been especially authorized to do so
+     by an Order in Council.
+
+     8. Powers were given to the Queen in Council which enabled her to
+     impose differential duties on the ships of any foreign country
+     which did the same with reference to British ships; and also to
+     place restrictions on importations from any foreign countries
+     which placed restrictions on British importations with such
+     countries.
+
+Finally, in 1849, with the adoption of the commercial policy founded on
+freedom of trade, came the repeal of the restrictive code, excepting
+only the rule as to the British coasting trade; and in 1854 the
+restrictions on that trade were removed, throwing it also open to the
+participation of all nations.
+
+Meanwhile the British ocean-mail subsidy system for steamship service,
+instituted with the satisfactory application of steam to ocean
+navigation, in the late eighteen-thirties, had become established: the
+first contract for open ocean service, made in 1837, being for the
+carriage of the Peninsular mails to Spain and Portugal. Although
+successful ventures in transatlantic steam navigation had begun nearly a
+score of years earlier, the practicability of the employment of steam in
+this service was not fully tested to the satisfaction of the British
+Admiralty till 1838.
+
+In this, as in so many other innovations, Americans led the way. The
+first steamer to cross the Atlantic was an American-built and
+American-manned craft. This pioneer was the _Savannah_, built in New
+York and bought for service between Savannah and Liverpool. She was a
+full-rigged sailing-vessel, of 300 tons, with auxiliary steam power
+furnished by an engine built in New Jersey. Her paddles were removable,
+so fashioned that they could be folded fan-like when the ship was under
+sail only.[S] She made the initial voyage, from Savannah to Liverpool,
+in the Summer of 1819, and accomplished it in twenty-seven days,[T]
+eighty hours of the time under steam. Afterwards she made a trip to St.
+Petersburg, partly steaming and partly sailing, with calls at ports
+along the way. Her gallant performance attracted wide attention, but
+upon her return to America she finally brought up at New York, where her
+machinery was removed and sold.
+
+An English-built full-fledged steamer made the next venture, but not
+until a decade after the _Savannah's_ feat. This was the _Curacoa_, 350
+tons, and one hundred horsepower, built for Hollanders, and sent out
+from England in 1829. The third was by a Canada-built ship--the _Royal
+William_, 500 or more tons, and eighty horsepower, with English-built
+engines, launched at Three Rivers. She crossed from Quebec to Gravesend
+in 1833. The next were the convincing tests that settled for the
+Admiralty the question of transatlantic mail service by steamship
+instead of sailing packet. These were the voyages out and back of the
+_Sirius_ and the _Great Western_ in 1838.
+
+The _Sirius_ had been in service between London and Cork. The _Great
+Western_ was new, and was the first steamship to be specially
+constructed for the trade between England and the United States. Both
+were much larger than their three predecessors in steam transatlantic
+ventures, and better equipped. The _Sirius_ started out with ninety-four
+passengers, on the fourth of April, 1838, and reached New York on the
+twenty-first, a passage of seventeen days. The _Great Western_, also
+with a full complement of passengers, left three days after the
+_Sirius_, sailing from Bristol, and swung into New York harbor on the
+twenty-third, making her passage in two days' less time than her rival.
+Both were hailed in New York with "immense acclamation." They sailed on
+their homeward voyage in May, six days apart, and made the return
+passage respectively in sixteen and fourteen days. The _Great Western_
+on her second homeward voyage beat all records, making the run in twelve
+days and fourteen hours, and "bringing with her the advices of the
+fastest American sailing-ships which had started from New York long
+before her."[U] This clinched the matter. The Admiralty now invited
+tenders for the transatlantic mail service, by steam, between Liverpool,
+Halifax, and New York.
+
+The first call for tenders was made in October, 1838. The St. George's
+Packet Company, owners of the _Sirius_, and the Great Western Steamship
+Company, owners of the _Great Western_, put in bids, the former offering
+a monthly service between Cork, Halifax, and New York for a yearly
+subsidy of sixty-five thousand pounds; the latter, a monthly service
+between Bristol, Halifax, and New York for forty-five thousand pounds a
+year.
+
+Neither offer was accepted for the reason, as was stated, that a
+semimonthly service was desired.[V] Instead, private arrangements were
+made with Samuel Cunard and associates for a carriage between Liverpool,
+Halifax, Quebec, and Boston, twice a month, for a term of seven years,
+the subsidy to be sixty thousand pounds annually, less four thousand
+pounds for making only one voyage a month in the winter season.[W] The
+contract required Mr. Cunard and his associates to furnish five ocean
+steamships and two river steamers, the latter on the St. Lawrence.[V]
+There were also definite restrictions as to turning their steamers over
+to the Government for use in time of war. All were to be inspected by
+Admiralty officers, and were to carry officers of the navy to care for
+the mails.[X] The service was started with the _Britannia_, the first of
+the four to be finished, sailing from Liverpool for Boston on July 4,
+1840. Thus was begun the career of the celebrated Cunard Line. In 1841
+the subsidy was increased to eighty thousand pounds, and the number of
+steamers to five; and in 1846, a further increase brought the subsidy to
+eighty-five thousand pounds.[Y]
+
+The Admiralty's favoritism toward the Cunard associates aroused a
+protest from the unsuccessful bidders for the subsidy, and at length the
+Great Western Company, whose bid had been the lowest, caused a
+Parliamentary inquiry to be made into the transaction. They complained
+that a monopoly had been granted "to their injury and to that of other
+owners of steamships engaged in the trade, and who were desirous of
+entering it"; and they asked the inquiry on the broad grounds "that the
+public were taxed for a service from which one company alone derived the
+advantage, and which could be equally well done and at less expense if
+mails were sent out by all steamers engaged in the trade, each receiving
+a certain amount percentage on the letters they carried."[Z] Although
+the fact was brought out in the testimony that the Great Western Company
+had offered to perform the service on practically the same basis as the
+Cunard associates, and that afterwards the Great Western had proposed to
+do it at half the subsidy to the Cunarders, the investigating committee
+sustained the Admiralty's action.[AA]
+
+The Great Western Company overcame the advantage of the Cunarders in the
+latter's high mail subsidy by increased enterprise and superior
+management; and prospered. In 1843 they launched the _Great Britain_,
+the largest and finest steamship up to that period built for overseas
+service.[AB] She was, moreover, distinguished as the first liner to be
+built of iron instead of wood, and to be propelled by the screw instead
+of the paddle-wheel. In the latter innovation, however, she was not the
+pioneer. Again the Americans were first in the application of the
+auxiliary screw to ocean navigation,[AC] as they had been first in
+despatching a steamer across the Atlantic.
+
+The initial transatlantic subsidy to the Cunard Company was followed up
+in 1840 and 1841 with contracts for steam mail-carriage to the West
+Indies and South American ports.[AD] The first (1840) went to the Royal
+Mail Steam Packet Company, for the West Indian service, the mail subsidy
+fixed at two hundred and forty thousand pounds a year;[AE] the second
+(1841), to the Pacific Steam Navigation Company. The latter enterprise
+was promoted by an American,[AF] after he had failed to obtain support
+in his own country[AG] for a project to establish an American steamship
+line to ports along the west coast of South America, a field in which
+American sailing ships had long been preeminent.[AH]
+
+Up to 1847 the British lines monopolized the transatlantic service. Then
+the situation became enlivened by the advent of competing American
+steamships subsidized by the United States Government, with high-paying
+mail contracts. The first of these was the New York, Havre, and Bremen
+line starting in 1847; the next, the celebrated Collins Line between New
+York and Liverpool, underway in 1850. The competing vessels were
+American-built, wooden side-wheelers; those of the Collins Line superior
+in equipment and in passenger accommodations, and faster sailers, than
+the British craft.[AI] To meet this competition the Cunard Company
+increased their fleet while the Admiralty increased the subsidy. Four
+new steamers were first added, in 1848, to run directly between
+Liverpool and New York, and the postal subsidy was raised to one hundred
+and forty-five thousand pounds a year for forty-four voyages--three
+thousand nine hundred and twenty-five pounds a voyage.[AJ] The
+competition began sharply with the regular running of the Collins
+liners, in 1850. Meanwhile during this year and the next additional
+contracts were given the Cunard Company for carrying the mails between
+Halifax, New York, and Bermuda, on the North American side, in small
+steamers, fitted with space for mounting an 18-pounder pivot-gun,
+subsidy ten thousand six hundred pounds a year; and for a monthly mail
+conveyance between Bermuda and St. Thomas, subsidy four thousand one
+hundred pounds a year.[AK] These services united the West Indies with
+the United States and Canada.[AK]
+
+In 1851 John Inman entered the trade with his "Inman Line" of
+transatlantic screw steamers, which were to carry general cargo and
+emigrant passengers, then a steadily increasing business, and to be
+independent in all respects of either the Admiralty or the
+Post-Office.[AL] The unsubsidized line prospered. The next year (1852)
+the Cunard Company increased their liners' horsepower, and the Admiralty
+again increased their subsidy. The contract, now made to run for ten
+years, provided a subsidy of one hundred and seventy-three thousand
+three hundred and forty pounds per fifty-two round trips a year. The
+Americans were pressing them closer. Now freight rates were cut, and the
+British premier is quoted as advising the Cunard Company to run without
+freight if necessary to "beat off the American line."[AM] The increasing
+subsidies occasioned a Parliamentary investigation. The committee,
+evidently impressed by the gravity of the American competition, reported
+that "the cost of the North American service was not excessive," but
+they advised that all contracts thereafter "be let at public
+bidding."[AN] This recommendation was not heeded. In 1857, upon the plea
+that the Americans were about to build larger and more powerful liners,
+the Cunard Company asked a five years' extension of the contract of
+1852. The extension was promptly granted. At the same time they were
+awarded an additional subsidy of three thousand pounds for a monthly
+mail service between New York and Nassau in the Bahamas.[AO] The next
+year (1858) after suffering crushing disasters in the loss of two of
+their steamers, and the withdrawal of their subsidy, the Collins Company
+failed, and their line was abandoned.[AP] So this competition ended.
+
+Meanwhile complaints of the Admiralty's partiality in the allotment of
+the contracts had been renewed more vigorously, with wider criticism of
+grants for mail carriage largely in excess of the postage received; and
+in 1859-60 another Parliamentary investigation was made. The ultimate
+result of this inquiry was a radical change in the system. The
+management of the ocean mail-service was taken from the Admiralty and
+placed wholly in the hands of the Post-Office Department; and at the
+expiration of the Cunard Company's extended contract, the service was
+thrown open to public competition, as the Parliamentary committee of
+1846 had advised.
+
+Bids were now received from the Cunard, the Inman, the North German
+Lloyd, and other lines. The Inman Company had previously offered to
+perform the service, and had done so for sea-postage only.[AQ] Contracts
+were finally concluded with the three named. The contract with the Inman
+Line was for a fortnightly Halifax service, for seven hundred and fifty
+pounds the round trip, nineteen thousand five hundred pounds a year, and
+a weekly New York service for sea-postage. That with the Cunard Line was
+for a weekly service to New York at a fixed subsidy of eighty thousand
+pounds. That with the North German Lloyd was for a weekly service, at
+the sea-postage. These contracts were to run for a year only. The
+Cunard's subsidy, although considerably less than half the amount that
+the company had received the previous ten years, showed a loss to the
+Government, at sea-postage rates, of forty-four thousand one hundred and
+ninety-six pounds, since the amount actually earned at sea-postage
+rates was twenty-eight thousand six hundred and eighty-six pounds.[AR]
+
+When advertisements for tenders were next issued, it was found that the
+Cunard and Inman companies had formed a "community of interests," with
+an agreement not to underbid each other. They asked a ten years'
+contract on the basis of fifty thousand pounds fixed subsidy for a
+weekly service. Instead, they were awarded seven years' contracts: the
+Cunard for a semi-weekly service, seventy thousand pounds subsidy; the
+Inman, for a weekly service, thirty-five thousand pounds subsidy.[AR] At
+the same time contracts were made with the North German Lloyd and the
+Hamburg-American lines for a weekly service for the sea-postage.
+
+The Cunard and Inman grants were sharply criticised, and a Parliamentary
+committee was appointed to investigate them. The committee's report
+sustained the critics. It observed that "the payments to be made when
+compared with those made by the American Post Office for the homeward
+mails are widely different, inasmuch as the American Post Office has
+hitherto paid only for actual services rendered at about half the rate
+of the British Post Office when paying by the quantity of letters
+carried." The committee recommended that these contracts be disapproved,
+and that the system of fixed subsidies be abolished. "Under all
+circumstances," they concluded, "we are of the opinion that, considering
+the already large and continually increasing means of communication with
+the United States, there is no longer any necessity for fixed subsidies
+for a term of years in the case of this service."[AS] This
+recommendation, however, was not accepted, and the contracts were duly
+ratified.
+
+The report of this Parliamentary committee is significant in the
+evidence it indirectly affords, confirming the declaration of
+1853,[AT]--that the postal subsidies were not as assumed, payments
+solely for services rendered, but in fact were concealed bounties.
+
+In 1871-72, when a renewed effort was made to establish an American
+line of American-built ships,[AU] the British subsidies were again
+increased. Then, also, was instituted by the Admiralty the naval
+subvention system--the payment of annual retainers to certain classes of
+merchant steamers, the largest and swiftest, in readiness for quick
+conversion into auxiliary naval ships in case of war, and to preclude
+their becoming available for the service of any power inimical to
+British interests.
+
+At the expiration of the Cunard and Inman seven years' contracts the
+postmaster-general applied the principle of payment according to weight
+throughout for the carriage of the North American mails. But preference
+was given to British ships, these receiving higher rates per pound than
+the foreign. In 1887 an arrangement was entered into by which the Cunard
+and Oceanic lines were to carry all mails except specially directed
+letters, and the pay was reduced.[AV] This method of payment continued
+till 1903.
+
+Then another sharp change was made in the subsidy system to meet
+another, and most threatening American move. In 1902 was formed by
+certain American steamship men, through the assistance of J. Pierpont
+Morgan, the "International Mercantile Marine Company," in popular
+parlance, the "Morgan Steamship Merger," a "combine" of a large
+proportion of the transatlantic steam lines.[AW] Upon this, in response
+to a popular clamor, subsidy, and in a large dose, was openly granted to
+sustain British supremacy in overseas steam-shipping. To keep the Cunard
+Line out of the American merger, and hold it absolutely under British
+control and British capitalization, and, furthermore, to aid the company
+immediately to build ships capable of equalling if not surpassing the
+highest type of ocean liners that had to that time been produced (the
+highest type then being German-built steamers operating under the German
+flag), the Cunard Company were resubsidized with a special fixed subsidy
+of three-quarters of a million dollars a year, instead of the Admiralty
+subvention of about seventy-five thousand dollars, and in addition to
+their regular mail pay, the subsidy to run for a period of twenty years
+after the completion of the second of two high-grade, high-speed ocean
+"greyhounds" called for for the Atlantic trade. The Government were to
+lend the money for the construction of the two new ships at the rate of
+2-3/4 per cent per annum, the company to repay the loan by annual
+payments extending over twenty years. The company on their part pledged
+themselves, until the expiry of the agreement, to remain a purely
+British undertaking, the management, the stock of the corporation, and
+their ships, to be in the hands of or held by British subjects only.
+They were to hold the whole of their fleet, including the two new
+vessels, and all others to be built, at the disposal of the Government,
+the latter being at liberty to charter or purchase any or all at agreed
+rates. They were not to raise freights unduly nor to give any
+preferential rates to foreigners.[AX] The subsidy is equivalent to about
+twenty thousand dollars for an outward voyage of three thousand miles.
+
+       *       *       *       *       *
+
+Of the British colonies, Canada grants mail and steamship subsidies, and
+fisheries bounties. In 1909-10 the Dominion's expenditures in mail and
+steamship subsidies amounted to a total equivalent to $1,736,372. The
+amount appropriated for 1910-11 increased to $2,054,200; while the
+estimates for 1911-12 reached a total of $2,006,206. In these estimates
+the larger items were: for service between Canada and Great Britain;
+Australia by the Pacific; Canadian Atlantic ports and Australia and New
+Zealand; South Africa; Mexico by the Atlantic, and by the Pacific; West
+Indies and South America; China and Japan; Canada and France.[AY] The
+home Government pays the same amount as Canada toward maintaining the
+China and Japan, and British West Indies services.[AZ] The fisheries
+bounties amounted to one hundred and sixty thousand dollars in 1909.[BA]
+
+       *       *       *       *       *
+
+The grand total of subsidies and subventions paid by Great Britain and
+all her colonies in 1911 approximate ten million dollars annually. The
+subsidies and mail pay of the Imperial Government amounted, in round
+numbers, to four million dollars, of which, in 1910, the Cunard Company
+received seven hundred and twenty-nine thousand dollars.[BB] Besides the
+Admiralty subventions, retainer bounties are paid to merchant seamen and
+fishermen of the Royal Naval Reserve.
+
+Since the establishment of steam in regular ocean navigation, and the
+substitution of iron for wooden ships, England has maintained her
+leadership among the maritime nations. The total tonnage of the United
+Kingdom and her colonies, steam and sailing ships, in 1910-11, stood at
+19,012,294 tons.[BC] nearly four fold that of any other nation.
+
+FOOTNOTES:
+
+[Footnote A: Royal Meeker, "History of Ship Subsidies."]
+
+[Footnote B: John E. Green, "Short History of the English People."]
+
+[Footnote C: W.H. Lindsay, "History of Merchant Shipping."]
+
+[Footnote D: Lindsay.]
+
+[Footnote E: David A. Wells, "Our Merchant Marine," p. 96.]
+
+[Footnote F: John Lewis Ricardo, "The Anatomy of the Navigation Laws,"
+p. 111.]
+
+[Footnote G: Lindsay, vol. III.]
+
+[Footnote H: Lindsay, "Our Navigation Laws"; also his History.]
+
+[Footnote I: Ricardo; also Lindsay in other words.]
+
+[Footnote J: Meaning the waters between Great Britain and the
+continent.]
+
+[Footnote K: Green, p. 593.]
+
+[Footnote L: Ricardo, p. 26.]
+
+[Footnote M: Meeker.]
+
+[Footnote N: W.W. Bates, "American Marine," pp. 57-59.]
+
+[Footnote O: John Macgregor, "Commercial Tariffs."]
+
+[Footnote P: Lindsay, vol. III, p. 65.]
+
+[Footnote Q: Macgregor.]
+
+[Footnote R: Lindsay, vol. III, p. 69; also pp. 53-54 and 107.]
+
+[Footnote S: Rear-Admiral George H. Preble, "Chronological History of
+Steam Navigation."]
+
+[Footnote T: Preble. Lindsay says thirty-seven.]
+
+[Footnote U: Preble, p. 137; also Bates, p. 185.]
+
+[Footnote V: Meeker.]
+
+[Footnote W: Parliamentary papers 1839, vol. XLVI, no. 566, as to the
+private contract.]
+
+[Footnote X: Lindsay, vol. IV.]
+
+[Footnote Y: Meeker; also Parl. papers 1849, vol. XII, no. 571.]
+
+[Footnote Z: Lindsay, vol. X; also Parl. papers, report H. of C., Aug.,
+1840.]
+
+[Footnote AA: Report of Select Com. (1846) Parl. papers, vol. XV, no.
+565, p. 3.]
+
+[Footnote AB: Lindsay, vol. IV.]
+
+[Footnote AC: The _Princeton_, sloop-of-war fitted with the Ericsson
+screw, launched the same year.]
+
+[Footnote AD: Lindsay, vol. IV, p. 198, _note_.]
+
+[Footnote AE: John R. Spears, "The Story of the American Merchant
+Marine," pp. 254-255.]
+
+[Footnote AF: William Wheelwright, of Newburyport, Massachusetts,
+sometime American consul at Guayaquil.]
+
+[Footnote AG: Winthrop L. Marvin, "The American Merchant Marine," p.
+231; also Preble; and Lindsay, vol. IV, pp. 316-330.]
+
+[Footnote AH: Marvin, p. 231.]
+
+[Footnote AI: See p. 76, _post_.]
+
+[Footnote AJ: Meeker.]
+
+[Footnote AK: Lindsay, vol. IV, p. 198, _note_.]
+
+[Footnote AL: Wells, p. 148.]
+
+[Footnote AM: Bates, p. 87; also p. 130.]
+
+[Footnote AN: Meeker.]
+
+[Footnote AO: Meeker.]
+
+[Footnote AP: See p. 77, _post_.]
+
+[Footnote AQ: Meeker.]
+
+[Footnote AR: Meeker.]
+
+[Footnote AS: Parl. papers, 1867-68, 1868-69.]
+
+[Footnote AT: See p. 20, _ante_.]
+
+[Footnote AU: The American Steamship Co. of Phila., with 4 iron steamers
+built on the Delaware--the _Pennsylvania_, _Ohio_, _Indiana_, and
+_Illinois_.]
+
+[Footnote AV: Meeker.]
+
+[Footnote AW: Ultimately embracing the American, Red Star, White Star,
+Atlantic Transport, and Dominion Lines.]
+
+[Footnote AX: For details of this contract see report of (U.S.)
+commissioner of navigation for 1903, pp. 48-52, and 224-268. The two
+steamships called for were the _Lusitania_, 31,550 gross tons, launched
+June 7, 1906; and the _Mauretania_, 31,937 gross tons, launched Sept.
+19, 1906, both quadruple screw turbines, about 70,000 horsepower; the
+largest, fastest, and completest steamers afloat till the production in
+1911 of the _Olympic_, 45,324 gross tons, of the International
+Mercantile Marine Co.'s White Star Line.]
+
+[Footnote AY: U.S. consul, Charlottetown, P.E.I. in daily Con. Repts.
+(Jan. 20) 1911, no. 16.]
+
+[Footnote AZ: Consul General Small, Halifax, in Con. Repts. (Dec.) 1905,
+no. 303.]
+
+[Footnote BA: The American Year Book, 1911.]
+
+[Footnote BB: American Year Book, 1911.]
+
+[Footnote BC: Lloyd's Register, 1910-11.]
+
+
+
+
+CHAPTER III
+
+FRANCE
+
+
+France has been rightly termed the bounty-giving nation _par
+excellence_.[BD] She first adopted a policy of State protection of
+native shipping in the middle of the sixteenth century with the
+enactment (1560) of an exclusive Navigation Act, forbidding her subjects
+to freight foreign vessels in any port of the realm, and prohibiting
+foreign ships from carrying any kind of merchandise from French
+ports.[BE] This was followed up in the next century with the institution
+of the direct bounty system to foster French-built ships.[BD]
+
+In the reign of Louis XIV, Colbert, Louis's celebrated finance minister,
+perfected (about 1661) an elaborate system of navigation laws, evidently
+copied from the rigorous English code. This was directed primarily
+against the commerce of Holland and England, with the ultimate object of
+upbuilding the home merchant marine and the laying of a broad basis for
+a national navy.[BF] These acts included decrees giving French ships the
+monopoly of trade to and from the colonies of France; imposing tonnage
+duties on foreign shipping; awarding direct premiums on French-built
+ships. England retaliated immediately. Holland remonstrated first, then
+made reprisals. For a time under Colbert's energetic administration of
+the finances and the marine, "prosperity grew apace. At the end of
+twelve years everything was flourishing."[BG] Then came the six years'
+war (1672-1678) with France and England combined against Holland, and at
+its end the French merchant marine lay sorely crippled.[BG]
+
+Still the fundamental principles of the stringent navigation laws long
+remained. A decree in 1681, and subsequent ordinances, defined what
+should constitute a French vessel; and corporal punishment was ordained
+against a captain for a second offence in navigating a vessel of alien
+ownership under the French flag.[BH] By later decrees, no alien was
+permitted to command a French vessel. An ordinance of 1727 further
+restricted alien command by shutting out even French subjects who had
+married aliens.[BH] It was required that every French vessel should be
+manned by a crew two-thirds of whom were French subjects.[BH] The system
+of regulations restricting the trade of the French colonies to French
+ships, and to the home market held till well into the nineteenth
+century.
+
+During the Revolution a decree (May, 1791) prohibited acquisition of all
+vessels of foreign build. In 1793 (Sept.) it was ordained that no
+foreign commodities, productions, or merchandise should be imported into
+France, or into any of her colonies or possessions, except directly in
+French ships, or in ships belonging to the inhabitants of the countries
+in which the articles imported were produced, or from the ordinary ports
+of sale or exportation. All officers and three-fourths of the crew were
+required to be natives of the country of which the foreign vessel bore
+the flag, under penalty of confiscation of vessel and cargo, and a fine
+enforcible under pain of imprisonment. A tonnage tax was levied on
+foreign ships alone.
+
+Despite this elaborate code designed for its benefit the domestic
+mercantile marine almost entirely disappeared during the wars of the
+Republic and the Empire; and after the Restoration its revival was so
+slow that for some time foreign ships were absolutely necessary for the
+supply of the French market.[BH] Still the underlying principles of the
+code were retained by the Restoration Government, modified in a few
+particulars. The modifications included the removal of the prohibition
+on indirect commerce--- the carrying trade between France and other
+countries:--yet advantage even in this commerce was held for the French
+flag through "flag surtaxes," added to the ordinary customs duties
+levied upon the merchandise imported into France in foreign bottoms,
+and by the tonnage charges.[BI] A law of March, 1822, renewed the
+prohibition against the importation of foreign-built ships.[BI]
+
+Early under Napoleon III movements toward the adoption of an economic
+policy similar to that then established in England were begun, and
+shortly a succession of radical changes in the maritime code were
+instituted.[BJ] In 1860 a commercial treaty with England was entered
+into. In 1861 freedom of access of foreign shipping to the French West
+Indies was permitted, subject to the payment of special duties varying
+according to the ports whence the goods were brought, or to which they
+were imported. Then at length, in 1866, numerous restrictions of the old
+code were swept away.[BJ] This law of 1866 (May) admitted duty-free all
+materials, raw or manufactured, including boilers and parts of engines
+necessary for the construction, rigging, and outfitting of iron or
+wooden ships; abolished a premium, or bounty, granted by a law of 1841
+(May) on all steam engines manufactured in France intended for
+international navigation; admitted to registration foreign-built and
+fully equipped ships upon the payment of two francs a ton; abolished all
+tonnage duties on foreign ships, except such as had been or might be
+levied for the improvement of certain commercial harbors; abolished the
+flag surtaxes; opened colonial navigation to foreign ships. The monopoly
+of the coasting trade alone was retained for French ships.[BK]
+
+Complaints against these new regulations were promptly raised by
+shipbuilders and ship-outfitters,[BK] and in 1870 a Parliamentary
+inquiry into their grievances was made. It appeared that shipbuilders,
+though enabled to import free such materials as they needed, were
+handicapped by numerous and extensive formalities; while the outfitters
+were embarrassed by special burdens which the law laid upon them, and
+which their British competitors did not have to bear.[BL] In 1872 laws
+were passed which reversed much of the act of 1866. A tax of from
+thirty to fifty francs a ton measurement was re-imposed on all foreign
+ships purchased for registration in France, together with a duty on
+marine engines; again a tonnage duty, of from fifty centimes to one
+franc, was imposed on ships of any flag coming from a foreign country or
+from the French colonies; and the provisions freeing materials for ship
+construction, and admitting foreign-built ships to French registration
+upon payment of the two-franc tax per ton, were repealed.[BM] In 1873 an
+extra-parliamentary commission took up the general question of the state
+of the commercial marine,[BN] and the outcome of this inquiry was the
+establishment of the system of direct bounties. This system was applied
+for the first time in the Merchant Marine Act passed in January, 1881.
+
+The act of 1881 granted both construction and navigation premiums, and
+was limited to ten years. The construction bounties, as was declared,
+were given "as compensation for the increased cost which the customs
+tariff imposed on shipbuilders" in consequence of the repeal of the law
+granting free import of materials by construction; the navigation
+bounties, "for the purpose of compensating the mercantile navy for the
+service it renders the country in the recruitment of the military navy."
+The construction bounties, on gross tonnage, were as follows: for wooden
+ships of less than 200 tons, ten francs a ton; of more than 200 tons,
+twenty francs; for composite ships, that is, ships with iron or steel
+beams and wooden sides, forty francs a ton; for iron or steel ships,
+sixty francs; for engines placed on steamers, and for boilers and other
+auxiliary apparatus, twelve francs per 100 kilograms; for renewing
+boilers, eight francs per 100 kilograms of new material used; for any
+modification of a ship increasing its tonnage, the above rates on the
+net increase of tonnage.[BO] The navigation bounties were confined to
+ships engaged in the foreign trade, and were to be reduced annually
+during the ten years' term of the law.[BP] They were thus fixed: for
+French-built ships, one franc and fifty centimes a registered ton for
+every thousand sea miles sailed the first year, the rate to diminish
+each succeeding year of the term seven francs and fifty centimes on
+wooden ships, and five centimes on iron and steel ships; for
+foreign-built ships owned by Frenchmen admitted to registry, one-half
+the above rates; for French-built steamers constructed according to
+plans of the Navy Department, an increase of fifteen per cent above the
+ordinary rate.[BQ]
+
+The first effect of this law was to stimulate the organization of a
+number of new steamship companies, and to occasion activity in various
+ship-yards, foreign (English) as well as home, in building steamships
+for their service.[BR] Most of the domestic-built iron and steam tonnage
+produced during the law's ten years' term was of steamers.[BS] The
+tonnage of steamships increased from 278,000 tons in 1880 to 500,000
+tons in 1890. Of this increase more than three-fifths were represented
+by vessels bought in other countries.[BT] The results of the navigation
+bounties are shown in official statistics covering the years 1882-1890.
+During this period iron or steel French-built ships earning these
+bounties increased from 159,714 tons to 190,831 tons, gross tonnage;
+while wooden or composite tonnage decreased from 150,233 tons to 57,068
+gross. Foreign-built iron or steel tonnage earning the bounties
+increased from 43,787 tons to 91,170 tons, gross; and wooden or
+composite tonnage increased from 1,220 tons to 9,799 tons, gross.[BS] In
+1891 the law which had then reached its limit of ten years was extended
+for two years. Doubting its renewal shipowners had sometime before
+ceased to increase their fleets.[BS]
+
+These results were variously pronounced unsatisfactory, and a revised or
+a new law was called for, with more and higher bounties. Owners of
+wooden sailing-ships were especially clamorous for larger benefits. They
+argued that sailing-ships being much slower than steamers should
+therefore receive higher mileage subsidies in order to compete on equal
+terms with steamships.[BU]
+
+A new law was enacted in 1893 (January 30). This act cut off bounties to
+foreign-built ships, and granted increased construction premiums. The
+construction subsidies were again declared to be given as "compensation
+for the charges imposed on shipbuilders by the customs tariff"; the
+navigation bounties, "by way of compensation for the burden imposed on
+the merchant marine as an instrument for recruiting the military
+marine." The construction subsidies were not to be definitely earned
+till the ships were registered as French; and by ships built in France
+for foreign mercantile fleets, not till they had been delivered. The
+navigation bounties were accorded to French-built ships, of more than 80
+tons for sailing-ships, and 100 tons gross for steamers, engaged in
+making long voyages and in international coasting; and were limited to
+ten years. They were based on gross tonnage per thousand sailed miles.
+To merchant steamships built in accordance with plans approved by the
+Navy Department, the rate of fifteen per cent above the regular
+navigation bounty provided in the law of 1881, was increased to
+twenty-five per cent. All ships receiving the navigation bounty were
+subject to impressment in case of war.[BV]
+
+The effect of this law appears to have been a division of the interests
+of shipowners and shipbuilders. The shipowners found the builders
+constantly increasing their prices until a point was reached where they
+were accused of absorbing both premiums for construction and navigation,
+by calculating the amount of bounty which proposed construction would
+demand, and adding that amount to their cost price.[BW] The increase of
+the bounty on sailing-ships was made in the expectation that it would
+check their falling off, which had been rapid since the development of
+steamship building; merchant sailing-ships were regarded as the best
+school for seamen, all of whom in French commerce, up to the age of
+forty-five, are subject at any time to draft into the national navy. It
+did this and more. There resulted the "strange phenomenon," as Professor
+Viallates puts it, "of a steady increase in the sailing-fleet, while the
+number of steam-ships remained stationary."[BX]
+
+Thus, like its predecessor, unsatisfactory, the law of 1893 was
+succeeded by another act further enlarging the bounty system. This law
+was promulgated in 1902 (April 7). It provided three classes of bounty:
+construction and navigation as before, and "commission compensation" or
+"shipping premiums." The construction bounty remained as in previous
+law. The navigation bounty, now introduced as awarded "as a general
+compensation for the charges imposed on the merchant navy, and for the
+excessive cost of vessels built in France," was increased.[BY] It was
+payable to all French-built sea-going ships, steam and sailing, of over
+100 tons gross, and less than fifteen years old, and was limited to
+twelve years. To stimulate speed development, only ships showing a trial
+speed of at least twelve knots with half load were to receive the full
+navigation bounty; to those making less than twelve knots the bounty was
+diminished by five per cent; to those making less than eleven, by ten
+per cent. The shipping bounty was declared to be granted "as
+compensation for the charges imposed on the mercantile marine" by making
+merchant vessels practically schools for seamen. It was a "chartered
+allowance" made to foreign-built iron or steel steamers manned under the
+French flag for long voyages or for international coastwise trade, of
+more than 100 gross tons, belonging to French private persons or
+joint-stock or other companies, the latter having on their boards a
+majority of French citizens, and the chairman and managers being French.
+This allowance was reckoned on the gross tonnage, and per day while the
+steamer was in actual commission (three hundred days the maximum number
+in any one year).[BX] The rate varied according to the tonnage. Up to
+2000 tons gross, it was fixed at five centimes per ton; from 2000 to
+3000 tons, at four centimes; 3000 to 4000, three centimes; above 4000,
+two centimes; over 7000, the same grant as 7000. The creation of this
+"chartered allowance," as Professor Viallates explains, was to prevent
+the navigation bounty from becoming to the same extent as under the
+previous law merely another form of bounty upon shipbuilding. It could
+so become, he points out, only to the extent of which it exceeded the
+owner's bounty.[BZ]
+
+Not all of the shipping and navigation bounties were to go to
+shipowners. Five per cent was to be retained for sailors' insurance
+"with a view to reducing the deductions imposed on them for the purpose
+of that insurance"; and six per cent to be reserved for distribution for
+the benefit of marines, as follows: "two-thirds to the provident fund,
+with a view to diminishing the deductions on mariners' pay and to
+increasing the funds for assisting the victims of shipwreck and other
+accidents, or their families; one-third to the invalids' fund, with a
+view to granting subventions to the chambers of commerce or public
+institutions for the creation and support of sailors' homes in French
+ports, intended to assist the nautical population, or of any other
+institutions likely to be of use to them, especially schools for
+seamen." The requirement in the old law of 1793 as to the composition of
+the crews of French merchant ships was modified, reducing the proportion
+of sailors who must be Frenchmen.
+
+French-built ships were privileged to chose between the shipping and the
+navigation bounties. To obtain the shipping bounty for the maximum of
+three hundred days steamers must make during the year a minimum of
+thirty-five thousand miles if engaged in the overseas trade, or
+twenty-five thousand if in "_cabotage international_."[CA] Shipowners
+agreeing to maintain on routes not served by the subsidized main
+steamers a regular line, performing a fixed minimum of journeys per
+year, with vessels of a certain age and tonnage, were permitted to
+claim, in lieu of the regular bounties, a fixed subsidy during the term
+of their agreement, equal to the average of the bounties to which the
+vessels in commission would be entitled for the whole of the journeys
+performed. The new tonnage to be admitted to the benefit of the law was
+limited to three hundred thousand gross tons of steamers and one hundred
+thousand gross tons of sailing-ships; of which new tonnage freight-built
+ships could form two-fifths. The appropriation for the payment of the
+bounties was also limited, to guard against a too heavy burden upon the
+national treasury. This was fixed at two hundred million francs: one
+hundred and fifty million for the shipping and navigation bounties and
+fifty million for the construction bounties.[CB]
+
+Unforeseen results of an unsatisfactory nature followed the application
+of this law. Professor Viallates effectively states them in the fewest
+words:
+
+     "To be sure of profiting by the advantages of the law the
+     ship-owners hastened to order vessels and to place them on the
+     stocks. Their haste increased when it was seen that there existed
+     a considerable discrepancy between the allowed tonnage and the
+     money appropriated. The appropriation of one hundred and fifty
+     million francs, opened to assure the payment of the navigation
+     bounties and the compensation for outfit, was much too little.
+     The rush was such, as soon as this formidable mistake was
+     discovered, that, less than nine months after its promulgation,
+     from December 20, 1902, the useful effect of the law was
+     completely exhausted."!
+
+Thereupon resort was had to another Extra-Parliamentary commission to
+frame another system. The result was a law of 1906 (April), which
+separated the shipbuilder from the shipowner. The provisions for the
+construction bounty were redrawn with the object, as Professor Viallates
+explains,[CC] "not only to equalize the customs duties affecting the
+materials employed, but also to give the builders a compensation
+sufficient to enable them to concede to the French shipowners the same
+prices as foreign builders." The rates were thus fixed on gross
+measurement: for iron and steel steamships, one hundred and forty-five
+francs per ton; for sailing-ships, ninety-five francs per ton: these
+bounties to decrease annually to four francs and fifty centimes for
+steamships and three francs ninety centimes for sailing-ships during the
+first ten years of the law's application, thereafter to stand at one
+hundred francs and sixty-five francs, respectively; for engines and
+auxiliary apparatus, twenty-seven francs fifty centimes per hundred
+kilograms. The navigation bounty to owners of French or foreign-built
+ships under the French flag, was calculated per day of actual running:
+for steamships, four centimes per ton gross up to 3000 tons; three
+centimes more up to 6000; two more to 6000 and above; for sailing-ships,
+three centimes per ton up to 500 tons, two more up to 1000, and one more
+to 1000 and above. This bounty to continue for the first twelve years of
+the law. The provisions for fostering speed development in steamships
+excluded from compensation those making on trial, half laden, less than
+nine knots, in place of ten in the previous law; reduced the rate to
+fifteen per cent of the bounty for those showing more than nine and less
+than ten knots; and increased this rate by ten per cent for those making
+at least fourteen knots, by twenty-five per cent for fifteen knots, and
+thirty per cent for sixteen knots. The extra bounty equal to twenty-five
+per cent of the regular navigation bounty to steamships constructed on
+plans approved by the Navy Department, and the provision making all
+merchant ships subject to requisition by the Government in case of war,
+were retained as in previous laws.[CD] This is the law at present in
+force.
+
+The total cost of the French bounty system in the twenty-four years from
+its establishment with the law of 1881 to 1904, when the law of 1902 had
+practically run out, was in round numbers upward of three hundred and
+eighty-one million francs. Professor Viallates shows that the new law of
+1906 would absorb during the first seven years of its application,
+upward of eighty-four million francs.[CE]
+
+These construction and navigation bounties are exclusive of the
+subventions to steamships for carrying the mails. The establishment of
+the French postal ocean steamship subsidy system dates back to 1857,
+when a contract was made with the Union Maritime Company for a service
+to New York, Mexico, and the West Indies. The assertion is made by
+Professor Meeker that the French postal subventions paid "ostensibly
+for the furtherance of the mails," are "both greater in amount and more
+influential upon shipbuilding, navigation, and commerce than are the
+general premiums upon shipbuilding and navigation."[CF] Says Viallates:
+
+     "The system is calculated to secure regular and rapid postal
+     communication with certain countries beyond seas, and at the same
+     time to constitute an auxiliary fleet capable of being utilized
+     by the navy in times of war. The existence of fixed lines with
+     constant service is also a means of favoring the expansion of the
+     national commerce. The State obtains, moreover, in exchange for
+     the subsidy, direct advantages; the free carriage of the mails
+     and the funds of the public treasury; transport of officials at a
+     reduced price, and of arms and stores destined for the service of
+     the State."
+
+Meeker:
+
+     "The greater part of the concealed subventions undoubtedly goes
+     to the shipbuilders, for all mail contract steamers must be built
+     in French yards and of French materials. These first costs are
+     estimated to be from twenty-five to fifty per cent greater in
+     France than in England."[CG]
+
+There is no competition in the letting of the French mail contracts.
+They go to four steamship concerns. For many years more than one half of
+the total steam tonnage of France has been owned by these four
+subsidized lines: the _Compagnie Generale Transatlantique_, the
+_Compagnie des Messageries Maritimes_, the _Chargeurs Reunis_, and the
+_Compagnie Fraissant_.[CG]
+
+The great ship-yards have developed a capacity for building steamships
+of the largest class. The tonnage since 1881, when it had fallen to
+914,000 tons, had increased only to 1,052,193 tons in 1900. By 1910-11,
+it had reached 1,882,280 tons.[CH] The total mail subsidies average, in
+round numbers, five million dollars a year, while the construction and
+navigation bounties amount to three and a half million dollars
+additional.
+
+Practically every French vessel floating the French flag and engaged in
+foreign trade either receives or has received subsidies, or bounties,
+from the Government.[CI]
+
+FOOTNOTES:
+
+[Footnote BD: Meeker.]
+
+[Footnote BE: Lindsay, vol. III.]
+
+[Footnote BF: Rear-Admiral Alfred T. Mahan, "The Influence of Sea Power
+upon History," pp. 105-107.]
+
+[Footnote BG: Mahan, p. 73.]
+
+[Footnote BH: Lindsay, vol. III.]
+
+[Footnote BI: Prof. Achille Viallates, "How France Protects Her Merchant
+Marine," in North American Review, vol. 184, 1907.]
+
+[Footnote BJ: Lindsay, vol. III.]
+
+[Footnote BK: Lindsay, vol. III, also Viallates.]
+
+[Footnote BL: Viallates.]
+
+[Footnote BM: Lindsay, vol. III, pp. 457-458.]
+
+[Footnote BN: Viallates.]
+
+[Footnote BO: Meeker. Also Wells, pp. 163-164, _note_.]
+
+[Footnote BP: Wells, pp. 163-164, _note._]
+
+[Footnote BQ: Meeker. Also Wells.]
+
+[Footnote BR: Wells, p. 164.]
+
+[Footnote BS: Meeker.]
+
+[Footnote BT: Viallates.]
+
+[Footnote BU: Meeker.]
+
+[Footnote BV: For this law see Meeker.]
+
+[Footnote BW: U.S. Consul Robert Skinner, Marseilles; Con. Repts., xol.
+XVIII (1900), p. 36.]
+
+[Footnote BX: Viallates.]
+
+[Footnote BY: Meeker.]
+
+[Footnote BZ: North American Review, vol. CLXXXIV, 1907.]
+
+[Footnote CA: Embracing voyages within the limits of the ports of the
+Mediterranean, North Africa, and Europe below the Arctic
+circle--Meeker.]
+
+[Footnote CB: Meeker and Viallates, summaries of this law.]
+
+[Footnote CC: North American Review, vol. CLXXXIV, 1907.]
+
+[Footnote CD: For this law see Senate Doc. no. 488, 59th Cong., 1st
+sess.]
+
+[Footnote CE: North American Review, vol. CLXXXIV, 1907.]
+
+[Footnote CF: Meeker.]
+
+[Footnote CG: Meeker.]
+
+[Footnote CH: Lloyd's Register, 1910-11.]
+
+[Footnote CI: Senate Rept., no. 10, 59th, Cong., 1st sess.]
+
+
+
+
+CHAPTER IV
+
+GERMANY
+
+
+Germany was a close follower of France in the adoption of the direct
+ship bounty system. Only two months after the promulgation of the
+initial French law of 1881, Bismarck brought the question before the
+Reichstag, with an exhibit of this act. In an elaborate memorial (April
+6, 1881) he reviewed the general subject of State bounties and subsidies
+to shipping in various maritime countries, and closed with this pointed
+declaration: "It is deserving of serious consideration whether, under
+the circumstances as given, German shipping and German commerce can
+hope" for further prosperous developments as against the competition of
+other nations aided by public funds and assistance.[CJ]
+
+At this time the German marine was represented by a substantial fleet of
+merchant steamships, but all were foreign-built, mostly from British
+ship-yards. The Government was paying only a postal subsidy of about
+forty-seven thousand dollars--a sum in proportion to the weight of the
+parcels forwarded--in the overseas trade to the participating German
+steam lines. A first step had been taken indirectly in favor of domestic
+shipbuilding six years earlier (1879), when Bismarck, in introducing the
+general protective system, exempted this industry, and free entry was
+permitted to German ship-yards of materials used in the construction and
+equipment of merchant as well as of war-ships, which then were only on
+the domestic stocks.[CK] Bismarck's proposal of 1881, to meet French
+subsidies with German subsidies, was avowedly with the single object of
+promoting with State aid a German mercantile marine.
+
+The project was brought before the Reichstag early in 1884 and warmly
+discussed. Earnest protests were raised against it by shipping merchants
+of the chief German seaports;[CL] while earnest support came from other
+merchants and varied interests. The initial proposal was for the
+establishment of a subsidized mail service by German steamships. It
+contemplated an annual subsidy of four million marks, with fifteen
+years' contracts, for such service between Germany and Australia and
+East Asia. The measure was defeated in the Reichstag that year. Brought
+forward the next year (1885), and in a new form, it was finally enacted
+in April and went into effect the following July.
+
+This law increased the annual subsidy from four million marks as first
+proposed to four million four hundred thousand marks, of which one
+million seven hundred thousand was offered for the East Asian line, to
+China and Japan; two million three hundred thousand for the Australian
+line, and four hundred thousand for a branch line connecting Trieste
+with the Australian line at Alexandria. The contracts in accordance with
+it all went to the North German Lloyd Company, of Bremen. The convention
+between the Government and this company required that the new vessels to
+be furnished must be built in German yards and of German material. The
+coal supply was, as far as practicable, to be of German product. The
+chancellor was empowered to take over all the company's steamers for the
+mobilization of the navy, at their full value, or on hire at proper
+compensation. The sale or loan of a steamer to a foreign power could be
+made only by permission of the chancellor. The number of voyages to be
+made on each line yearly, and the rate of speed, were set down in
+careful detail. Failure to observe the table of voyages, without
+sufficient reason, subjected the company to heavy penalties. All persons
+employed in connection with the mail service were, if practicable, to be
+German subjects. All officers in the service of the empire, relief
+crews, weapons, ammunition, equipments, or supplies for the imperial
+navy, were to be carried at twenty per cent under the regular
+tariff.[CM]
+
+Subsequent laws made additions to the free list of raw and manufactured
+shipbuilding material; and preferential rates on the State railroads
+were arranged for the transportation of steel, iron, timber, from the
+interior, where these are found at an average distance of some four
+hundred miles from the coast, to the ship-yards.[CN] Speedily large and
+superior steamships were designed and turned out from the enlarged
+ship-yards, the first ocean flyer being the _Auguste Victoria_ for the
+Hamburg-American Line. In 1890 a subsidy of ninety thousand marks
+annually was granted for an East African line on a ten-years' contract.
+Within less than six years the establishment of a fortnightly Asiatic
+service was agitated; and in 1896 a bill granting a yearly subsidy of
+one million four hundred thousand marks therefor, was brought before the
+Reichstag. If this were forthcoming the North German Lloyd agreed,
+besides furnishing the fortnightly service, to increase the speed of
+their steamers, to send ships direct to Japan, and to meet all
+requirements of the Admiralty with respect to ships and crews.[CO]
+
+Now the advocates of further subsidies maintained that the policy
+instituted with the law of 1885 had proved its effectiveness. The
+indirect advantages from the subventions were claimed to be quite as
+great as the direct. While before 1885 all large ships for German
+companies had been ordered in England, now all large ships for the
+German transatlantic lines were built in Germany.[CO] This condition,
+the increasing activity in domestic shipbuilding, and the steady growth
+of the empire's commercial marine, were presented as conclusive evidence
+of the law's effect. Germany was now pressing into sharp rivalry with
+England, and turning out larger and speedier steamships.[CP] The
+increased subsidy for the China service was especially urged upon these
+grounds: the importance of placing the German mail service in the East
+on a par with the services of England and France, the benefits to
+commerce, and the aid of the national defence.[CQ]
+
+The measure met opposition at the session in which it was first
+introduced; but at the next session (1898), after amendment, it became
+law. By this act the subsidy was fixed at one million and a half marks a
+year for the extension of the East Asiatic service to China direct, and
+for making the whole service fortnightly; and the contract was extended
+for another fifteen years. It was conditioned that if foreign competing
+lines should increase the speed of their ships the North German Lloyd
+must do likewise, and without additional subsidy, unless the foreign
+companies should receive extra payments.[CR]
+
+The total annual subventions for the Asiatic and Australian service had
+now reached five million five hundred and ninety thousand marks
+($1,330,420). After January, 1899, under a contract between the North
+German Lloyd and the Hamburg-American Line then made, a part of this
+subsidy went to the latter. In 1901 the subvention to the East African
+line was increased to one million three hundred and fifty thousand
+marks. Thus Germany's grand total of annual payments in postal
+subventions had reached six million nine hundred and forty thousand
+marks.
+
+Besides these postal subventions and the free entry to materials used in
+ship-construction and equipment, and the preferential railway rates on
+long hauls of the heavy domestic materials, barely covering the cost of
+handling and transportation,[CS] the Government bestows a special form
+of indirect bounty upon the subsidized steamship lines in the shape of
+largely reduced through freight rates. These include substantial
+reductions on merchandise exported from inland Germany to East Africa
+and the Levant. Thus the combined land and sea through rates are brought
+considerably below those in force on goods sent to German ports for
+direct importation.[CT]
+
+Under these and other favoring conditions the German merchant marine has
+advanced in total tonnage from an insignificant place in 1880 to the
+third in rank among the maritime nations in 1911. Between 1885 and
+1900, a period of only fifteen years, its growth was tenfold.[CU] In
+1890 the gross tonnage stood at 928,911 tons: in 1900 it had reached a
+total of 2,159,919 tons. Steamers and sailing-ships were nearly equal in
+tonnage. German-built steamships had won the speed record in ocean
+liners. Thereafter the output of steamships became much the larger, and
+in 1906 the Government was taking measures to revive the sailing-ship
+trade, because of its value as a training-school for seamen for the
+navy.[CV] In 1910-11 the total tonnage was recorded at 4,333,186
+tons.[CW]
+
+The other influences contributing to this extraordinary growth are
+variously stated according to the observer's point of view. The United
+States consul at Hamburg sees them in the "rapid transformation of the
+country from a non-producing nation into one of the foremost industrial
+powers of Europe, a large available supply of excellent and cheap labor,
+and the geographical situation of the empire."[CX] The historian of
+Modern Germany sees them in German business methods:
+
+     "The astonishing success of the German shipbuilding industry is
+     due partly to its excellent management and organization; partly
+     to the application of science and experience to industry; * * *
+     partly to the harmonious co-ordination and co-operation of the
+     various economic factors which in more individualistic countries,
+     such as Great Britain, are not co-ordinated, and often serve
+     rather to obstruct and to retard progress by unnecessary friction
+     than to provide it by harmonious action."[CY]
+
+FOOTNOTES:
+
+[Footnote CJ: For this Memorial see U.S. Con. Rept., no. 112, Jan.,
+1890, pp. 108-118.]
+
+[Footnote CK: J. Ellis Barker, "Modern Germany," 3rd edition, 1909.]
+
+[Footnote CL: Wells, p. 166.]
+
+[Footnote CM: U.S. Con. Rept., no. 61, 1886, pp. 285-287.]
+
+[Footnote CN: Barker, 3rd ed.]
+
+[Footnote CO: Meeker.]
+
+[Footnote CP: U.S. Con. Repts., 1889, no. 101, p. 544.]
+
+[Footnote CQ: Meeker. Also German report on the operation of the law of
+1885, in report of (U.S.) commissioner of navigation for 1898.]
+
+[Footnote CR: Meeker. Also German report on the operating of the law of
+1885, in report of commission of navigation for 1898.]
+
+[Footnote CS: Barker, 3rd ed.]
+
+[Footnote CT: Meeker.]
+
+[Footnote CU: Barker, 3rd ed.]
+
+[Footnote CV: U.S. Con. Rept, no. 13, July, 1906, pp. 87-89.]
+
+[Footnote CW: Lloyd's Register, 1910-11.]
+
+[Footnote CX: U.S. Consul General Robert P. Skinner, Hamburg, in Daily
+Con. Repts., April 8, 1911, no. 82.]
+
+[Footnote CY: Barker, Modern Germany, p. 490.]
+
+
+
+
+CHAPTER V
+
+HOLLAND--BELGIUM
+
+
+The home Government of the Netherlands gives neither construction nor
+navigation bounties. Only subventions to steamship lines for carrying
+the mails are granted. The single purpose of these subventions is
+declared to be to secure the prompt and effective furtherance of the
+mails at reasonable cost.[CZ] The contracts are not publicly let, but go
+to the several steamship lines plying to foreign ports and to the Dutch
+colonies. The amounts fixed by contract are at a given rate per voyage.
+The cost of the subventions to the Dutch East Indian lines is divided
+equally between the home and colonial Governments. Independently of the
+home Government the Dutch East Indian Government grants general mileage
+subventions for the maintenance of lines making regular communication
+with the various ports of the East Indies.[CZ] Holland's gross tonnage
+in 1910 had reached the respectable total of 1,015,193 tons,[DA] ranking
+her eighth among the maritime nations.
+
+       *       *       *       *       *
+
+Belgium had a subsidy system for shipbuilding before 1852. At present
+neither bounties to domestic shipping nor postal subventions are paid by
+the Government. Subsidies, or premiums, however, are given to certain
+foreign steamship lines to encourage the commerce of Antwerp. These
+include an annual payment of eighty thousand francs ($15,440), and the
+refunding of lighterage and pilotage dues, to the North German Lloyd on
+their East Asiatic and Australian lines; and fifteen hundred francs
+($289.50) to the German-Australian line for each call to and from
+Australia, the maximum subvention limited to thirty-nine thousand francs
+($7527). A Danish steamship concern is also exempted from lighterage
+and harbor dues and granted other facilities, but receives no money
+premiums.[DB] Belgium tonnage in 1910 comprised only 165 steam and
+sailing ships for a total of 299,638 tons.[DC]
+
+FOOTNOTES:
+
+[Footnote CZ: Meeker.]
+
+[Footnote DA: Lloyd's Register, 1910-11.]
+
+[Footnote DB: Meeker.]
+
+[Footnote DC: Lloyd's Register, 1910-11.]
+
+
+
+
+CHAPTER VI
+
+AUSTRIA-HUNGARY
+
+
+The Imperial Government of Austria-Hungary spurred by the action of
+Germany, instituted a direct subsidy system, also modelled after that of
+France, in 1893, when the Austrian merchant marine was languishing.[DD]
+
+A postal subsidy had long been in operation, the subsidies being all
+awarded to a single steamship company--the Austrian Lloyd, earlier the
+Austro-Hungarian Lloyd. They were practically mileage and speed
+bounties,[DE] increasing with the extension of service. Ten-years'
+contracts were at first made with this company. The contracts, executed
+in 1888, particularly guarded domestic interests. In the purchase of
+materials it was required that preference be given to Austro-Hungarian
+industries. The coal used must be bought from Austro-Hungarian subjects
+in the proportion of two tons from Austria and one ton from Hungary,
+provided that "the price is not greater than foreign coal, and that the
+steam-producing power of the native coal is equal to at least
+eighty-four per cent of that of foreign coal." In the building and
+repairing of their ships, or parts of ships, and engines, the company
+must also favor home interests. Ships, engines, or boilers could be
+ordered abroad only with the consent of the foreign office when shown
+that the work cannot be made in Austria within proper time, or that the
+want can be supplied by a foreign country on more favorable terms.[DF]
+
+By a law of July, 1891, the rates for mail-contract steamships were
+fixed as follows: for fast lines, making above ten knots, a maximum rate
+of seventy kreutzers per nautical mile; for slower lines, fifty
+kreutzers a mile. The total amount of mileage bounty payable each year
+was limited to two million nine hundred and ten thousand florins. But
+in addition to this bounty the Government agreed to pay the Suez Canal
+tolls. To encourage the Austrian Lloyd to build larger and swifter
+vessels the Government further agreed to advance the company one million
+and a half florins. This was to be furnished in three equal payments
+yearly (1891, 1892, 1893), and was to be repaid in five equal payments
+of three hundred thousand florins each, beginning in January, 1902. The
+company's ships were to be exempted from consular fees, "the same as
+vessels of the imperial navy"; and were to be at the disposal of the
+naval and military departments in case of war. All the officials of the
+company were to be Austrian subjects, "naval officers either active or
+retired to be given the preference"; and there was to be an
+administrative committee of eight members, the president appointed by
+the Emperor and two other members by the ministry of commerce, the
+intention of this provision being to give the Government control over
+the company's affairs.[DG]
+
+The general subsidy law of 1893 (November 28) was the outcome of the
+deliberations of a special Parliamentary committee appointed that year;
+and its declared object, as set forth in this committee's report, was
+"to put a stop to the decline of our merchant fleet, to allow it to cope
+with foreign competition, and to secure for the inhabitants of our coast
+needed employment and profits in maritime pursuits."[DG] Three years
+before (1890), with the same object in view, a preliminary step had been
+taken in the exemption of all iron and steel steam and sailing ships
+from trading and income taxes while engaged in ocean voyages.[DG]
+
+The law provided two classes of subsidies--a trade bounty and a
+navigation bounty. They were to go to all steamers and sailing-ships
+engaged in the deepseas trade or long-coasting trade, and not receiving
+mail subventions. At this time a large percentage of the Austrian steam
+tonnage was receiving the postal subsidies, and most of this tonnage was
+owned by the Austrian Lloyd Company.[DG] The trade bounty was for ships
+making long voyages; the navigation bounty for those engaged in
+coastwise voyaging. Ships entitled to the trade bounty were required to
+be owned at least two-thirds by Austrian subjects, to be not over
+fifteen years old, and registered A1 or A2. The rates were thus fixed:
+for the first year after launching, iron or steel steamers, six florins
+($2.44) per ton, iron or steel sailing-ships, four florins and fifty
+kreutzers; wooden or composite (part iron) sailing-ships, three florins.
+After the first year the rate was to be reduced five per cent annually
+till the end of the fifteenth year. As an inducement to employ home work
+and to utilize home materials, the bounty was to be increased by ten per
+cent for iron or steel sailing-ships built in the Austrian ship-yards,
+and by twenty-five per cent if at least one-half of the materials used
+in the construction were of Austrian origin. If more than one year had
+elapsed since the launching of a ship otherwise entitled to a bounty, a
+deduction of fifteen per cent was to be made for each year that had
+passed. The navigation bounty was fixed at five kreutzers per net ton of
+capacity for every hundred nautical miles sailed. The exemption from the
+production and income taxes, granted in 1890, was extended for a term of
+five years from January 1, 1894. The law was to be in force for ten
+years.
+
+As the end of the term of this law was approaching ship-owners began
+agitating for its renewal with an increase in the subsidy. Since its
+enactment the production of steam tonnage had been accelerated, and the
+decline of sail tonnage had been checked; but no marked change in the
+merchant marine generally had been manifest.[DH] Of the bounties paid
+the Austrian Lloyd had received a large share in behalf of their ships
+which were not directly under contract for the mail service. The
+remainder went to the various companies controlling the coast and river
+trade. The ten to twenty-five per cent addition to the trade bounty for
+ships built in domestic yards and from domestic materials, finally went
+for the most part to a single large building concern at Trieste. While
+most of the Austrian tonnage was yet of foreign build, mostly
+constructed in British yards, the increase in the proportion of domestic
+build was considerable after 1893. The greater part of the materials
+used was Austrian product. Consequently allied industries increased with
+this increased output of home ships.[DI]
+
+At length in 1907 (February 23) a new law was enacted increasing the
+navigation and construction bounties. For the navigation subsidies, to
+go to shipowners according to the tonnage of the ships and the number of
+miles run, allotments were thus made: for the first year, $852,600; for
+1908, $893,200; 1909, $954,100; 1910, $1,015,000; 1911, $1,075,000; and
+for the five years remaining of the term, of the law--which ends
+December 31, 1916--$1,136,800 a year. The construction subsidies were
+raised as follows: for ships launched after July 1, 1907: steamers built
+of iron and steel $8.12 per gross ton, sailing-ships of iron and steel,
+$2.84; for marine engines, boilers, pipes, and auxiliary apparatus,
+$1.62 per 220.46 pounds. To entitle a ship to these bounties fifty per
+cent of the materials used in its construction must be home product.[DJ]
+
+This year (1907) also the annual postal subventions to the Austrian
+Lloyd were increased $1,486,586, for a further period of fifteen years.
+This contract called for an increase of speed to the Levant and the
+Orient. The Suez Canal tolls were to be paid by the Government as
+before.
+
+       *       *       *       *       *
+
+The Kingdom of Hungary grants bounties to Hungarian ships, or ships
+owned in greater part by Hungarian subjects, independently of the
+Imperial Government. Her first general bounty law was also enacted in
+1893 and was limited to ten years. The subsidies granted were of two
+classes--premium on purchase, and a mileage bounty. The purchase subsidy
+was based on net tonnage and was payable for a term of fifteen years
+from the date of the ship's launching, reduced each succeeding year by
+seven per cent; the mileage subsidy, for the same term, was in
+proportion to the length of the voyages made "in the interest of
+national commerce whether to or from Hungarian ports." The premiums on
+purchase were thus fixed for the first year: for vessels employed in
+long-distance coasting trade--sailing-ships, six krone (each 20 cents);
+steamers, nine krone per ton; employed in deep-sea trade,--sailing-ships,
+nine krone; steamers, twelve krone per ton. Iron or steel ships rated
+first class were entitled to these bounties. The mileage subsidy was
+fixed at five hellers per ton, per hundred nautical miles run. It was
+offered only for voyages "to places where no company in receipt of
+State subsidies is obliged to maintain regular communications;" and
+it was not to be given for "petty coasting trade."[DK]
+
+This law was succeeded by an act of 1895 granting construction bounties,
+with the intent of fostering domestic shipping and the use of domestic
+material. The rates were proportioned according to the amount of foreign
+or domestic material used, construction with domestic product receiving
+the highest bounty. These rates were: for iron or steel hulls, thirty to
+sixty krone per ton; for wooden ships, ten to twenty-five krone per ton;
+for engines and auxiliary machinery, ten to fifteen krone per ton of
+materials used; for boilers and pipes, six to ten krone per ton of
+material. The total amount to be paid out yearly was limited to the
+modest figure of two hundred thousand krone ($40,600).[DL]
+
+The law of 1895 in reality was not effective, for ships of the Hungarian
+merchant marine continued to be built in foreign parts--mainly in
+British yards;[DK] and while the carrying capacity had considerably
+increased, the tonnage had continued to decline.[DK] By 1904 the
+situation had become so unsatisfactory that, as the American consul at
+Budapest wrote, the passing of a new navigation-development law by
+Hungary's Parliament had, it was believed, become a pressing
+necessity.[DM]
+
+       *       *       *       *       *
+
+In 1909 the Austrian Government guaranteed a maximum sum of one million
+crowns (approximating $200,000) annually to the Austro-American Shipping
+Company for their service between Trieste and Brazil and Argentine
+ports. Should the service tend successfully to promote home industries
+and agriculture, this subsidy was to be increased, the amount of
+increase to depend upon the amount of cargo carried in excess of a
+certain minimum. The contract was to run for fifteen years from January
+1, 1910. The service, beginning with sailings three times a month, was
+to become weekly on January 1, 1911.[DN]
+
+The total Austria-Hungary tonnage in 1910-11 was recorded at 779,029
+tons.[DO]
+
+FOOTNOTES:
+
+[Footnote DD: Meeker.]
+
+[Footnote DE: U.S. Con. Rept., Jan., 1890, no. 112, p. 95-96.]
+
+[Footnote DF: U.S. Con. Repts., vol. XXXII, 1890, no. 112, pp. 23-24.]
+
+[Footnote DG: Meeker.]
+
+[Footnote DH: U.S. Con. Rept., no. 282, March, 1904, pp. 645-646.]
+
+[Footnote DI: Meeker.]
+
+[Footnote DJ: U.S. Con. Rept., no. 320, July, 1907, p. 180.]
+
+[Footnote DK: Meeker.]
+
+[Footnote DL: Meeker. Also Parl. papers, Com., 1909, no. 4, p. 8.]
+
+[Footnote DM: U.S. Con. Rept., no. 283, April, 1904, p. 304.]
+
+[Footnote DN: U.S. Con. Rept., no. 352, Jan., 1910, p. 45.]
+
+[Footnote DO: Lloyd's Register, 1910-11.]
+
+
+
+
+CHAPTER VII
+
+ITALY
+
+
+Early after its establishment in 1861 the Kingdom of Italy adopted a
+subsidy system with the object of reviving and upbuilding the then
+languishing Italian merchant marine. This policy was instituted in 1866
+with the grant of premiums on the construction of wooden ships. At the
+same time materials used in the construction, repair, or enlargement of
+ships were made duty-free.[DP]
+
+For a while under these conditions, before iron ships had come much into
+use, the merchant marine prospered. Then it again began to languish; and
+in 1881 the promulgation of the French general bounty law was made the
+special occasion for considering the adoption of a similar measure.[DQ]
+The draft of a bill modelled after that law was promptly introduced in
+the Chamber of Deputies, in February. But with its consideration such
+perplexities arose that at length the whole subject was referred to a
+commission of inquiry, to investigate and report a more satisfactory
+one. The result of this inquiry was a bill which became law December 6,
+1885, to continue in force for ten years.
+
+This law provided for general construction subsidies, on the following
+scale: for steamers and sailing-ships built of iron or steel, sixty lire
+($11.58) per gross ton; for steam or sailing ships built of wood,
+fifteen lire; for _galleggianti_ (floating material: the term signifying
+merchant ships navigating the Italian seaboard, rivers, and lakes, but
+not provided with certificates of nationality), of iron or steel, thirty
+lire; for construction and repairs of marine engines, ten lire per
+quintal; for marine boilers, six lire per hundred kilograms of weight.
+These bounties were to be increased from 10 to 20 per cent (according to
+the degree of speed and other desirable qualities shown) for steamers
+built on plans approved by the Government engineers as to be
+convertible into cruisers, showing a speed of not less than fourteen
+knots an hour, and with sufficient coal-carrying space to steam four
+thousand miles at ten knots. The law was applicable to ships bought
+abroad as well as those of domestic build. But it forbade the sale or
+charter to a foreigner of any steamer upon which the bounty had been
+paid, except by Government permission. The laws of 1866 granting
+premiums and free entry to shipbuilding materials were suspended during
+the ten years' term of this act.[DR]
+
+In 1888, a new tariff of the previous year (July, 1887) having increased
+the customs duties on shipbuilding materials, additional bounties on
+construction and repair were granted by a royal decree to offset these
+disadvantages to the shipbuilders. A provision was added for the payment
+of fifty lire per gross ton for construction of war-ships, and eight and
+a half-lire per horsepower for engines, nine and a half lire per quintal
+for boilers, and eleven lire per quintal for other apparatus, to be used
+in war-ships. Navigation bounties were also added to Italian ships as
+follows: 0.65 lire per gross ton for every thousand sea miles run beyond
+the Suez Canal or the Strait of Gibraltar to or from ports outside of
+Europe; the same for ships sailing between one continent with its
+adjacent islands and another continent with its adjacent islands,
+outside the Mediterranean. Sailing-ships of above fifteen years of age
+were ineligible to these bounties; so also were mail-route steamers.[DS]
+
+In 1896, after the expiration of this law, a new law was enacted (July
+23) closely modelled upon it. The construction subsidies were the same,
+except that war-ships built for foreign countries were debarred from
+receiving bounties. The navigation subsidy per gross ton for every
+thousand sea miles sailed beyond the Suez Canal and the Strait of
+Gibraltar was increased to 0.80 lire, the rate to be diminished by ten
+centimes for steamers and fifteen centimes for sailing-ships every three
+years. An important addition was the reenactment of the customs rebates
+on shipbuilding materials. This law was also to be in force ten
+years.[DS]
+
+In 1900 (November 16) a royal decree was issued modifying the law of
+1896 in several particulars. No bounty was hereafter to be allowed to
+vessels built in Italian yards for foreigners. The customs drawbacks
+were abrogated, and in place of them was granted a bounty of five lire
+per quintal of metal used in repairs. A bounty of fifty-five lire per
+gross ton was offered for iron or steel steamers showing a speed of
+above fifteen knots; fifty lire, for steamers speeding twelve to fifteen
+knots; forty-five lire, for steamers or sailing-ships with speed below
+twelve knots; and thirteen lire per net ton for modern hulls. The
+navigation subsidies per gross ton per thousand miles, were thus fixed:
+for steamers, forty centimes up to the fifteenth year after
+construction; for sailing-ships, twenty centimes up to the twenty-first
+year after construction. The yearly distances run for which the bounties
+were to be paid were limited to thirty-two thousand miles for a steamer
+below twelve knots; forty thousand for one of twelve to fifteen knots;
+fifty thousand above fifteen knots, and ten thousand for a sailing-ship.
+All Italian ships were eligible to this bounty; foreign ships were
+debarred. The maximum expenditure for all the bounties was limited to
+ten million lire ($2,000,000) a year.
+
+In 1910 (May) a new subsidy bill was enacted providing for the
+continuance of the arrangement under the measure of 1900, with a few
+immaterial modifications.[DT] Early in 1911 the Government was reported
+to have in readiness ten bills looking to the support of domestic
+shipping and shipbuilding. Eight of these had relation to the increase
+of subsidy on the Italian mail and cargo service of the Mediterranean.
+Other routes subsidized included lines to Central America, Chile,
+Canada. Domestic shipbuilding was to be aided to the extent of twelve
+hundred and forty thousand dollars.[DU]
+
+Italy's mail subvention system dates from 1877, when the Italian
+steamship companies by a convention (July 15) consolidated with the
+Government.[DV] All the lines receiving the mail subsidy came to be
+owned by a single powerful corporation, the Italian General Navigation
+Company. While the rates paid per mile are not so high as those paid by
+several other countries, the requirements as to size of vessels, speed,
+and amount of service to be rendered, are less exacting. Accordingly
+these subventions are in fact, as Professor Meeker recognizes them,
+"partly in the nature of concealed bounties." In 1879 the Government
+spent in these subventions a total equalling $1,593,214. By 1889 the
+total had only slightly increased, the amount that year being
+$1,849,392. In 1908 the total was $2,328,917. The mail steamships are
+required to carry government civil and military employees at half price.
+
+Previous to 1896 the Italian General Navigation Company owned more than
+half of the Italian steam tonnage, and most of the large steamships.[DW]
+After 1896 the sail tonnage steadily increased. In 1905 it was recorded
+that "the Italian flag now flies over some of the best modern
+transatlantic liners in the port of New York; the Mediterranean is full
+of Italian ships; and the Lloyd Italiano has five new ten-thousand-ton
+steamers nearly ready for service in South America."[DX] Between 1890
+and 1910 the Italian gross tonnage increased from 809,598 tons to
+1,320,653 tons.[DY]
+
+FOOTNOTES:
+
+[Footnote DP: Meeker.]
+
+[Footnote DQ: Bismarck's Memorial to the German Reichstag, April, 1881.]
+
+[Footnote DR: U.S. Con. Rept., Jan., 1890, no. 112, pp. 61-62. Also
+Meeker.]
+
+[Footnote DS: Meeker.]
+
+[Footnote DT: U.S. Consul J. K. Wood, Venice, in Daily Con. Repts., no.
+30, Aug 9, 1910.]
+
+[Footnote DU: U.S. Consul T. St. J. Gaffney, Dresden, Germany, in Daily
+Con. Repts., no. 83, April 10, 1911.]
+
+[Footnote DV: Meeker.]
+
+[Footnote DW: Meeker.]
+
+[Footnote DX: U.S. Senate Rept., no. 10, 59th Cong., 1st sess.]
+
+[Footnote DY: Lloyd's Register, 1910-11.]
+
+
+
+
+CHAPTER VIII
+
+SPAIN--PORTUGAL
+
+
+Spain instituted a ship-construction bounty system in 1880, when her
+merchant marine was languishing, and in 1886 a comprehensive system of
+mail subventions, contracting for the whole ocean service with a single
+steamship company, _La Compania Transatlantica Espanola_.
+
+Previous to 1886, for a quarter of a century and more, postal
+subventions had been given to private commercial houses, or individuals,
+providing steam communication with the Spanish colonies and foreign
+ports; but much of the service during that period had been performed by
+this company through cessions from the holders of the contracts. Before
+the adoption of the private contract system, the service to the colonies
+had been performed by the first regular steamship line between the
+Peninsula and the Antilles (in 1850), established at the State's
+expense. The ships of this line were all under the command of officers
+of the navy, and performed various services for the Government besides
+carrying the mails and despatches.
+
+Under the contract of 1886 (ratified by the Cortes in 1887) the company
+were to furnish all the mail steam communication between the Peninsula
+and the colonies and possessions, and foreign ports, for a total maximum
+subvention of 8,445,222 pesetas ($1,689,044) annually. The subsidy was
+calculated on the number of nautical miles run. The total sum was
+distributed among the budgets for the Peninsula and the several
+colonies.[DZ] In 1909 the subvention was redistributed over the various
+lines, the total amounting in round numbers to $1,665,600. The contract
+went as a whole also to the Spanish Transatlantic Company, to run for
+twenty years. A particular requirement was that the company must favor
+Spanish trade in every possible way.[EA]
+
+The first construction subsidy law, that of 1880 (June 25), granted a
+bounty of forty francs ($7.72) per measured ton of 2.83 cubic metres on
+all ships built in Spain. All tariff duties paid on imported materials
+for building, careening, or repairing ships or their machinery, were to
+be refunded by the Government.[EB]
+
+During the decade between 1880 and 1890 the Spanish marine slowly
+increased. Further to foster it, in 1895 a more general subsidy law was
+enacted. This act granted a construction subsidy of forty pesetas
+($7.72) per gross ton for wooden ships; seventy-five pesetas ($14.48),
+for iron and steel steamers; and fifty-five pesetas ($10.62), for ships
+of mixed construction and for sailing-ships of iron and steel.[EC]
+
+The year following the passage of this law was marked by rapid expansion
+in the national marine. Then came a more rapid decline. This was due, it
+is assumed, to increased taxes, and business depression occasioned by
+the colonial wars, involving enlarged Government expenditures and the
+cutting off of much colonial trade.[EC] During the war with the United
+States (1898) Spain lost eighteen large steamers of 31,316 tons. After
+that war, with the development of her national resources, the Spanish
+marine again began rapidly to grow.[EC]
+
+In 1909 (law of June 14) the system was extended with the addition of
+general navigation bounties calling for an annual expenditure of
+2,750,000 pesetas ($530,750). For ships making monthly sailings to
+various named points, among them Brazil, Uruguay, and the Argentines,
+and semi-weekly sailings to Algeria, bounties were provided ranging from
+seven to seventeen cents per ton gross for every thousand miles run, to
+continue for a period of ten years. Spanish ships manned by Spanish
+crews and ranked by maritime agencies as first class were made eligible
+to them. All ships receiving these bounties must admit naval cadets and
+perform certain services for the Government. To shipbuilders, as off-set
+to the duties on imported materials which they must pay, bounties for
+port materials as well as for ships were granted by this law. The
+construction subsidies were increased to $13.84 per gross ton for wooden
+ships not possessing their own motor power, and $17.30 self-propelling;
+$20.76 for iron or steel ships without motor, $27.68 for ships for
+freight only, $29.41, freight and passengers; and $32 passengers only.
+Ten per cent of the bounties for passenger ships was to be added for
+each knot made above fourteen per hour. The sale of a ship to a
+foreigner within two years after the ship's construction was made
+invalid unless about a third of the bounty received be repaid. Ships
+built abroad for Spanish citizens were to be relieved of certain duties
+"provided it appears that it was absolutely necessary that they be built
+abroad."[ED]
+
+The total amount paid in mail subventions in 1910 was $1,858,186; in
+navigation subsidies, $1,291,826. The total Spanish tonnage the same
+year comprised 579 vessels of 765,460 tons.[EE]
+
+       *       *       *       *       *
+
+Portugal grants postal subventions of comparatively small amounts to
+three steamship companies which perform all her mail carrying. A move
+toward the institution of a general subsidy system was made in 1899,
+when a bill was before the Cortes providing construction and navigation
+bounties for the encouragement of domestic shipbuilding and ship-using;
+but this measure was not enacted. In 1911 the republic offered a subsidy
+of one thousand dollars per voyage in either direction for steamship
+service between Lisbon and New York, with call at the Azores, the
+contract to run for three years.[EF] Portugal controls her shipping
+service with her colonies, the trade with them being restricted to the
+Portuguese flag.[EG] Her total tonnage is small: in 1910 only 110,183
+tons.[EH]
+
+FOOTNOTES:
+
+[Footnote DZ: U.S. Con. Rept., no. 112, January, 1890, pp. 54-56.]
+
+[Footnote EA: U.S. Vice Con. Gen. William Dawson jr., Con. Repts., no.
+349, Oct., 1910.]
+
+[Footnote EB: U.S. Con. Repts., 1890.]
+
+[Footnote EC: Meeker.]
+
+[Footnote ED: U.S. Con. Rept., no. 349, Oct., 1909.]
+
+[Footnote EE: Lloyd's Register, 1910-11.]
+
+[Footnote EF: Daily Con. Repts., no. 106, May 1, 1911.]
+
+[Footnote EG: Meeker. Also Parliamentary papers.]
+
+[Footnote EH: Lloyd's Register, 1910-11.]
+
+
+
+
+CHAPTER IX
+
+DENMARK--NORWAY--SWEDEN
+
+
+Denmark pays postal subventions to two steamship companies for carrying
+the mails to Sweden and to Iceland, and "trade" subsidies to other
+companies to encourage particularly the export trade. The latter are
+payments directly for reductions in freight rates, which are supervised
+by the Government.[EI] The postal subventions are not large, and they
+are generally accepted as only fair remuneration for service
+rendered.[EJ]
+
+       *       *       *       *       *
+
+Norway and Sweden both give subsidies for mail carriage solely, and
+grant no direct bounties on shipping. Both, however, undertake the
+furtherance of commerce and navigation through "State contributions," in
+the form of loans to shipowners from Government funds.[EK] Such aid has
+been granted to several steamship lines. In 1910 the Swedish Government
+granted a loan equivalent to half a million dollars American money
+toward the capital of a new line between Swedish ports and New York,
+Philadelphia, and Baltimore.[EL] Shipping is exempt from taxation in
+both countries.[EM] The Swedish tonnage in 1910 stood at a total of 1472
+vessels of 918,079 tons.[EN]
+
+       *       *       *       *       *
+
+In Norway the laws put no restriction upon shipowners as to purchase in
+any market. Most of her steam tonnage is foreign-bought, and largely
+second-hand. Her merchant fleet, however, consists for the greater part,
+of wooden sailing-ships, and these are mostly of domestic build.[EM]
+Besides the mail subsidies the Government grant "trade" subsidies to
+some forty Norwegian steamship companies to enable them to maintain
+routes to various foreign ports. These subsidies amount to about half a
+million dollars annually.[EO] In 1910 Norway stood in tonnage fourth
+among European maritime countries: her total tonnage being 2,014,533
+tons.[EP] Norway has by far the largest percentage of sea-faring
+population, and her mariners are found in the crews of all nations in
+Europe and America.
+
+FOOTNOTES:
+
+[Footnote EI: Meeker.]
+
+[Footnote EJ: Parl. papers.]
+
+[Footnote EK: Meeker.]
+
+[Footnote EL: U.S. Con. Rept., no. 82, 1910, p. 106.]
+
+[Footnote EM: Meeker.]
+
+[Footnote EN: Lloyd's Register, 1910-11.]
+
+[Footnote EO: Report of (U.S.) commissioner of navigation for 1909.]
+
+[Footnote EP: Lloyd's Register, 1910-11.]
+
+
+
+
+CHAPTER X
+
+RUSSIA
+
+
+In Russia steamship lines were early subsidized with mileage bounties,
+besides receiving postal subventions; and later the Government adopted
+the policy of returning the Suez Canal tolls to the subsidized lines.
+The mileage subsidies are direct bounties avowedly for the encouragement
+of Russian navigation, and are very large.[EQ]
+
+In 1898 a Government commission, appointed to consider and report upon
+the state of the empire's mercantile marine, declared that Russia was
+losing a vast sum annually through the lack of a sufficient commercial
+fleet of her own, and yet no progress seemed to be making toward
+increasing her tonnage. To remedy this unsatisfactory condition the
+commission suggested the removal of the duty on ships built abroad for
+Russia, and the free admission of all material necessary for ship
+construction.[ER]
+
+Favoring laws followed. By a measure of July that year (1898) ships
+bought abroad, if destined for the foreign sea-borne trade, were
+exempted for a period of ten years from the heavy duties levied on such
+vessels.[EQ] The next year (1899) the coasting trade, reserved
+exclusively for Russian ships, was extended to include navigation
+between any two Russian ports in any seas; and, further to restrict this
+trade to subjects of the empire, it was enacted that ships engaged in it
+must be manned exclusively by Russian officers and seamen.[EQ]
+
+At this period Russia's shipping industry, outside the Government works
+for the construction of battle-ships, was of comparatively little
+consequence. In the few extensive ship-yards river steamers, tugs, and
+other small craft, built from Russian materials and by Russian workmen,
+were chiefly turned out. The materials could be bought cheaper abroad,
+but Russian labor was cheaper. According to the United States consul at
+St. Petersburg, the wages of common workmen were then from fifty-one to
+sixty-four cents a day, while skilled workmen were receiving but
+seventy-seven cents to one dollar a day.[ES]
+
+In the decade 1890-1901 the amount of subsidies expended directly to
+encourage shipping increased rapidly, and the tonnage increased in
+extent and importance. In 1890-91 the total tonnage stood at 427,335
+tons of which 156,070 were steam and 271,265 sailing ships. In 1902-03 a
+total of 800,334 tons was reached, of which 556,102 were steam and
+244,232 sailing ships.[ET]
+
+In 1902 the granting of bounties in the form of loans to ship-owners was
+proposed, with the object of inducing them to buy Russian ships built of
+Russian materials instead of foreign product. The scheme contemplated a
+mortgage on the finished ship at fifty per cent of the actual cost,
+without interest, to cover a period of twenty years, the loans to be in
+equal yearly payments. The amount of the bounty was to depend upon the
+difference between the cost of home-built and foreign-built ships. The
+loans were to be made only on first-class sea-going steamers. The plans
+and specifications were to be approved by the minister of finance before
+building; and steamers of over one thousand tons register must show an
+average speed of not less than ten knots on a six hours' trial; those
+under one thousand tons, of not less than eight knots. In addition to
+the loans the Government was to bear part of the expense of insurance.
+To facilitate the export of Russian goods in Russian-built ships, a
+rebate was allowed of half the expense of Russian coal used in steamers
+carrying less than three-fourths of a full cargo on export, and one-half
+cargo on import. It was estimated that this scheme for fostering
+domestic shipbuilding would entail smaller drafts on the national
+treasury than would the granting of direct construction and navigation
+premiums.[EU]
+
+Progress was checked appreciably by the war with Japan (1904-05). But
+the year after, the empire was active again in advancing her interests
+in the East, by systematically granting subsidies to steamship lines to
+various Asiatic points.[EV] By 1909 the tonnage had been brought to a
+total of 700,959 tons, approaching that of the year before the war. Of
+this total 443,243 was steam tonnage. The greater part of the steam
+fleet was foreign built, only 167 of the total, 898 steamers, being of
+Russian product. The largest number were built in England (341). Others
+were obtained from various European yards. More than ninety per cent
+were of iron and steel. Of the sailing-ships, ninety per cent were home
+product.[EW] In 1910 the total tonnage stood at 887,325 tons.[EX]
+
+The mileage subsidies in 1910 were going principally to eleven steamship
+companies; the postal subventions mainly to four. Those receiving the
+mileage subsidies carry the mails and Government passengers free. The
+largest mileage subsidy goes to the Black Sea Navigation Company, the
+oldest and most important of the subsidized lines (founded in 1856, with
+Government aid).[EY] In addition to the subsidy the Government pays back
+the Suez Canal tolls. The Russian Volunteer Fleet stands second on the
+list of subsidy receivers. This is practically a Government affair. It
+was created in the war-time of 1877-78, by private subscription, as an
+auxiliary war fleet; and was reorganized for general service in 1892.
+The members of the board of managers are State nominees, and the
+officers and crews are regarded as employees of the crown.[EZ] The
+subsidy is fixed at six hundred thousand rubles ($309,999) a year; and
+the refunded Suez Canal tolls amount to another six hundred thousand
+rubles.[FA]
+
+The mileage subsidies, given directly to foster shipping, increased
+rapidly from year to year after 1890, while the postal subventions, for
+mail carriage chiefly, remained practically constant.[FB]
+
+FOOTNOTES:
+
+[Footnote EQ: Meeker.]
+
+[Footnote ER: U.S. Consul Smith, Moscow, in Con. Rept., no. 216, p. 149,
+Sept., 1898.]
+
+[Footnote ES: U.S. Con. Gen. R.T. Greener, St. Petersburg, in U.S. Con.
+Rept., no. 236, p. 91, May, 1900.]
+
+[Footnote ET: Report of The Merchant Marine Commission (U.S.), 1905,
+vol. II, p. 947.]
+
+[Footnote EU: U.S. Commercial Agent R.T. Greener, Vladivostock, in U.S.
+Con. Repts., no. 265, p. 218, October, 1902.]
+
+[Footnote EV: Same, no. 313, p. 140, October, 1906.]
+
+[Footnote EW: Con. Gen. John H. Snodgrass, Moscow, in U.S. Con. Repts.,
+no. 354, pp. 32-33, March, 1910.]
+
+[Footnote EX: Lloyd's Register, 1910-11.]
+
+[Footnote EY: Con. Gen. Snodgrass, Con. Repts., no. 102, Oct., 1910.]
+
+[Footnote EZ: Parl. papers: Report of com. of enquiry into Steamship
+Subsidies, 1901.]
+
+[Footnote FA: List given in Rept. of Mer. Marine Com., with totals paid
+in 1902-03, vol. 2, p. 946.]
+
+[Footnote FB: Mecker.]
+
+
+
+
+CHAPTER XI
+
+JAPAN--CHINA
+
+
+While France is the bounty-giving nation _par excellence_, Japan is a
+pressing second. The development of a modern merchant marine, together
+with a modern navy, was among the first undertakings of the awakening
+empire upon her assumption of Occidental civilization. Adopting what
+seemed to her statesmen of the new regime, from their study of Western
+methods, to be the speediest way to that end, she started out
+energetically to attain it through lavish money-grants from the national
+treasury for the establishment of steamship companies of her own people
+in coastwise and ocean service, and of modernized ship-yards and
+shipbuilders.
+
+The initial venture resulted in the creation of a steamship monopoly.
+This was the subsidizing, in 1877, of the pioneer concern, to supply
+steam communication between various domestic ports, and also with
+Siberia, China, and Corea. It was founded by a broad-visioned Japanese
+merchant, Jwasaki Yataro,[FC] and controlled by him. To break his
+monopoly the Government in 1882 set up a rival State-supported
+company.[FC] After a period of "desperate competition" and warfare,
+Jwasaki persuaded the new concern to unite with his. So was effected a
+community of interests after the most approved Western pattern.[FC] By
+this union was formed, in 1885, the powerful _Nippon Yusen Kaisha_
+(Japan Mail Steamship Company), which remained the most powerful of
+Japanese steamship establishments, with lines running to the same ports
+to which the American steamers run.
+
+Coincident with the State-aiding of steamship companies was the granting
+of liberal postal subvention. Next followed the institution of a general
+subsidy system, frankly designed to stimulate domestic shipbuilding and
+to further navigation by Japanese ships.
+
+This system was embodied in two acts promulgated in 1896, the year after
+the finish of the Japan-China War (1894-95), when the merchant marine
+was growing pretty rapidly, but not rapidly enough for the aspiring
+nation. These were, a Shipbuilding Encouragement Law, the aim of which
+was to stimulate the building of vessels above 700 tons; and a
+Navigation Encouragement Law, to foster open-sea navigation. Their model
+was the French system.
+
+These laws offered construction and navigation subsidies, and also made
+provision for a widely extended postal service with increased postal
+subventions. The construction bounties were available for "any company
+composed of Japanese subjects exclusively as members and shareholders
+which shall establish a ship-yard conforming to the requirements of the
+Minister of State for Communications, and shall build ships." The rates
+were fixed as follows: for ships of over 1000 tons, twenty yen ($9.96)
+per gross ton; of over 700 and under 1000 tons, twelve yen; for engines
+built with ships, or in any other domestic dock-yard, with the consent
+of the Minister of Communications, five yen per horsepower. Japanese
+materials only were to be used, unless the Minister of Communications
+should give permission to use foreign materials. The navigation bounties
+were granted only for iron and steel ships owned exclusively by Japanese
+subjects, and plying between Japan and foreign ports. The rates in this
+class were: twenty-five sen (about 12-1/2 cents) per gross ton per
+thousand miles run for ships of 1000 tons steaming at ten knots an hour;
+ten per cent added for every additional 500 tons up to 6000 tons, and
+twenty per cent for every additional knot up to seventeen. Foreign-built
+ships less than five years old, owned by Japanese, were admitted to
+these bounties. The postal routes established were fifteen in number,
+calling for an annual expenditure of 4,964,404 yen (about $2,482,202)
+when in full operation. The payments for postal service were to be
+computed at the mileage rate given for navigation. Previous to this act
+the postal subventions had amounted annually to nine hundred and
+forty-five thousand yen in 1890 and 1891, and nine hundred and thirty
+thousand yen in the subsequent years.[FD]
+
+The effect of these laws was to stimulate overproduction. The _Nippon
+Yusen Kaisha_ ordered eighteen large freight steamers aggregating 88,000
+tons. Other companies doubled and trebled their fleets.[FD] One result
+of the overproduction was the forcing down of freights. This, together
+with the business depression of 1898-99, brought losses to the shipping
+companies despite the large subsidies. The rapidly increasing amounts of
+the subsidies, too, were giving the Government concern. From a total of
+1,027,275 yen in 1896 the sum expended annually had grown by 1899 to
+5,846,956 yen. The total paid between 1896 and 1899 had amounted to
+13,133,440 yen, about $6,566,720.[FD]
+
+Accordingly, in 1899 (March), a law was enacted modifying the system.
+The navigation bounties on foreign-built ships were reduced by half,
+while the subventions to the postal lines were fixed at certain yearly
+sums. A law of 1900 (February 23) extended the postal services. Under
+these laws the postal subventions reached a total of about 5,647,811 yen
+($2,823,905) a year. Of this total the _Nippon Yusen Kaisha's_ was the
+lion's share,--4,299,861 yen, about $2,149,930.[FD]
+
+After the passage of these laws the various companies further increased
+their tonnage, but the merchant marine grew more wholesomely for a
+while. In 1902 the total tonnage had reached 934,000 tons, and the
+Japanese mercantile fleet had risen to the position of eighth in the
+world in point of tonnage, whereas in 1892 it was only thirteenth.[FE]
+In 1907 the United States consul at Yokohama wrote: "The building of
+ships of over ten thousand tons in Japanese yards is now quite
+common.... The war [with Russia] has given a great impetus to the
+shipbuilding and dock-yard industry which has made remarkable progress
+during the last few years."[FF]
+
+That year (1907) the Government brought forward several ship-subsidy
+bills making provision for further Japan sea services.[FG] In 1908 the
+amount of State aid to the merchant marine had increased to an
+equivalent of $6,170,566 and additional amounts were asked for, one for
+the line to South America.[FH] The budget for 1908-09 carried the
+largest amounts yet devoted by Japan to ship subsidizing. At the end of
+1908 official statistics placed the number of steamers at 1618, with a
+gross tonnage of 1,153,340.42. Of these, one hundred and one were
+steamers of more than three thousand tons.[FH]
+
+In 1909 a new subsidy system was adopted (the laws of 1896 revised), to
+go into effect January 1 1910. The fixed navigation bounties granted by
+the old system on specified routes were abolished, and a general subsidy
+offered open to all steamships conforming to the provisions of the new
+law. The subsidized open-sea routes, however, were limited to four--the
+European, the North American, South American, and Australian;[FI] and
+coasting services in the Far East were not affected. Among other
+conditions imposed on the beneficiaries were the requirements that
+steamers must carry more than one-half their maximum load; that each
+must have a wireless telegraph outfit, this, however, instituted at the
+Government's expense; that the Department of Communications be furnished
+with information as to freights and passenger rates; and that proper
+terminal facilities, as piers, warehouses, lighters, be provided by the
+subsidized companies.[FJ] The steamers receiving the full subsidy must
+be home-built, of steel, of over 3000 tons gross, and showing a speed of
+at least twelve knots per hour. The rate was fixed at fifty sen per
+gross ton for every thousand nautical miles, and ten per cent of this
+sum added per additional speed of one nautical mile an hour, according
+to the conditions of the route. Upon a vessel the age of which exceeds
+five years the subsidy decreases five per cent each year till the age
+of fifteen is reached, when it ceases. Foreign-built steamers under five
+years of age, which may be put in service with the sanction of the
+Government authorities, are entitled to half of the subsidy. The
+construction subsidies were arranged in two classes, and each class in
+four grades.[FK] The rates were slightly increased over those of the law
+of 1896, and their benefits were limited to steel vessels of over 1000
+tons instead of 700 tons.
+
+The total appropriations for ship subsidies in the budget for 1911-12
+amounted, in American money, to $6,845,995, of which $6,294,020 were for
+navigation, and $551,975 for construction subsidies: an increase of
+$478,387 in the former class over the appropriation of the previous
+year, and a decrease in the latter class of $6,835.[FL]
+
+The total Japanese tonnage in 1910 stood at 1,149,200 tons.[FM] The
+_Nippon Yusen Kaisha_ practically owns nine-tenths of the ocean-going
+steamships flying the Japanese flag.[FN]
+
+       *       *       *       *       *
+
+China, too, taking on Western ways, is emulating Japan in establishing a
+modern merchant marine. The Government is giving State aid to native
+steamship companies, and subsidizing ship-yards. According to the United
+States consul-general at Hongkong the Government is now (1911) to
+furnish half of the amount of an extension of the capital of the Chinese
+Merchants' Steam Navigation Company to twenty million taels (about
+$12,600,000 gold), and thirty additional steamers of modern type are to
+be built for service--ten on foreign routes, including a route to the
+United States, and twenty on routes between Chinese ports; while a new
+ship-yard is to be set up at Shanghai under Government auspices,
+capitalized at five million taels (about $3,200,000 gold).
+
+FOOTNOTES:
+
+[Footnote FC: Meeker.]
+
+[Footnote FD: Meeker.]
+
+[Footnote FE: U.S. Con. Rept., no. 282, March, 1904.]
+
+[Footnote FF: U.S. Con. Rept., no. 316, Jan, 1907, pp. 92-93.]
+
+[Footnote FG: Con. Gen. H.B. Miller, Yokohama, in Con. Repts., no. 32,
+pp. 120-121, May, 1907.]
+
+[Footnote FH: Vice Con. Gen. E.G. Babbitt, Yokohama, in Con. Repts., no.
+344, p. 216, May, 1909.]
+
+[Footnote FI: Japan Year Book, 1911.]
+
+[Footnote FJ: U.S. Con. Gen. Thomas Sammons, Yokohama, in Daily Con.
+Repts., no. 38, Aug. 17, 1910.]
+
+[Footnote FK: Japan Year Book, 1911.]
+
+[Footnote FL: U.S. Ambassador Thomas J. O'Brien, Tokyo, in Daily Con.
+Repts., no. 123, May 26, 1911.]
+
+[Footnote FM: Lloyd's Register, 1910-11.]
+
+[Footnote FN: Japan Year Book, 1911.]
+
+
+
+
+CHAPTER XII
+
+SOUTH AMERICA
+
+
+Brazil gives subventions from the Federal treasury to several foreign
+steamship companies, and some of the States of the federation also make
+similar grants from their treasuries. Besides the subventions to lines
+to foreign ports, the Government grants State aid to a considerable
+number of coast lines operating between Rio de Janeiro and other
+Brazilian ports. The total amount of the subventions in 1910 was equal
+to $1,437,880.[FO] The principal beneficiary was the _Lloyd Brazileiro_,
+maintaining the line between Brazilian ports and the United States.
+
+       *       *       *       *       *
+
+Argentina is adopting a policy of giving subsidies to foreign steamship
+companies which extend her communications with foreign ports. As far
+back as 1865 a decree was issued offering a subsidy of twenty thousand
+dollars a year for a line between Argentina and the United States. But
+it was not taken. In 1911 the Government was prepared to pay a subsidy
+to a new steamship company promoted to furnish a regular service to
+South Africa.[FP] In 1911 there appeared the first steam vessel flying
+the American flag at Buenos Aires in twenty years.[FQ]
+
+Chile grants mail subsidies, which have no appreciable effect in the
+merchant marine.[FR]
+
+FOOTNOTES:
+
+[Footnote FO: Con. Gen. George E. Anderson, Rio de Janeiro, in Daily
+Con. Repts., no. 55, p. 719, Sept. 7, 1910.]
+
+[Footnote FP: Daily Con. Repts., March 18, 1911.]
+
+[Footnote FQ: Same, January 20, 1911.]
+
+[Footnote FR: Meeker.]
+
+
+
+
+CHAPTER XIII
+
+THE UNITED STATES
+
+
+While a navigation code founded in 1790 and 1792, and developed in 1816,
+1817, and 1820, after the model of the then existing English code,[FS]
+has been retained in modified form through enactments in subsequent
+years, a system of general ship-subsidies, though repeatedly proposed,
+has never been adopted by the United States. From 1793 to 1866 bounties
+were given to fishing vessels and men employed in the bank and other
+deep-sea fisheries,[FT] but no subsidies to the merchant marine were
+granted till 1845, and these were only postal subsidies--payments in
+excess of an equivalent for services to be rendered in ocean
+mail-carriage. The law enacted that year had for its declared purpose
+the encouragement of American ocean steamship-building and running. With
+this act, therefore, the real history of Government aid to domestic
+shipping in this country begins.
+
+At the time of the adoption of this policy America was still leading the
+world in ocean sailing-ships with her splendid fleets of fast-sailing
+packets and "clippers", while England had taken the lead in steamships.
+The law of 1845 was the culmination of a move begun in Congress in 1841,
+the year after the first Cunarder had crossed from Liverpool to Halifax
+and Boston. Its aim was to parry England's bold stroke for maritime
+supremacy with her State-aided steamship lines, and directly to "protect
+our merchant shipping from this new and strange menace."[FU] The first
+move of 1841 was for an appropriation of a million dollars annually for
+foreign-mails carriage in American-owned ships.[FU]
+
+The law of 1845 (March 3) authorized the postmaster-general to contract
+with American ship-owners exclusively for this service to be performed
+in American vessels, steamships preferred, and by American citizens, for
+a period of from four to ten years, with the proviso that Congress by
+joint resolve might at any time terminate a contract. The subsidy was
+embodied in the rates of postage thus fixed: upon all letters and
+packets not exceeding a half-ounce in weight, between any ports of the
+United States and any foreign ports not less than three thousand miles
+distant, twenty-four cents, with the inland postage added; upon letters
+and packets over one half-ounce in weight, and not exceeding one ounce,
+forty-eight cents, and for every additional half-ounce or fraction of an
+ounce, fifteen cents; to any of the West India Islands, or islands in
+the Gulf of Mexico, ten cents, twenty cents, and five cents,
+respectively; upon each newspaper, pamphlet, and price-current to any of
+the ports and places above enumerated, three cents: inland postage to be
+added in all cases. The postmaster-general was to give the preference to
+such bidder as should propose to carry the mails in a steamship rather
+than a sailing-ship. Contractors were to turn their ships over to the
+Government upon demand for conversion into ships of war, the Government
+to pay therefor the fair full value, as ascertained by appraisers. The
+postmaster-general was further authorized to make ten-years' contracts
+for mail carriage from place to place in the United States in steamboats
+by sea, or on the Gulf of Mexico, or on the Mississippi River up to New
+Orleans, on the same conditions regarding the transfer of the ships to
+the Government when required for use as war ships.[FV]
+
+The next year, 1846, in the annual post-office appropriations act (June
+19), provision was made for the application of twenty-five thousand
+dollars toward the establishment of a line of mail steamers between the
+United States and Bremen; and early in 1847 (February 3) a contract was
+duly concluded for a Bremen and Havre service, the first under the law
+of 1845.
+
+This was a five years' contract entered into with the Ocean Steam
+Navigation Company, upon the basis of an earlier agreement (February
+1846) with Edward Mills of New York, which Mr. Mills had transferred to
+the new organization. The subsidy was fixed at one hundred thousand
+dollars a year for each ship going by Cowes to Bremen and back to New
+York once in two months a year, and seventy-five thousand dollars a year
+for each ship going by Cowes to Havre and back to New York. The
+contractors were to build within a year's time four first-class
+steamships of not less than 1400 tons, nor less than a thousand
+horsepower; and were to run their line "with greater speed to the
+distance than is performed by the Cunard Line between Boston and
+Liverpool and back."[FW] Provision for the subsidy thus called for was
+promptly made in this item in the post-office appropriation bill for the
+ensuing year, approved March 2: "for transportation by steam-ships
+between New York and Bremen according to the contract with Edward Mills,
+$258,609."[FX]
+
+The next step was the enactment of a law which had for its declared
+objects "to provide efficient mail services, to encourage navigation and
+commerce, and to build up a powerful fleet in case of war."[FY] This
+measure, approved March 3, 1847, entitled "An act to provide for the
+building and equipment of four naval steamships," made provision for the
+construction, with Government aid, of merchant mail-steamships under the
+supervision of the Navy Department that they might be rendered suitable
+if needed for war service.
+
+The act directed the secretary of the navy to accept on the part of the
+Government certain proposals that had been made for the carriage of the
+United States mails to foreign ports in American-built and
+American-owned steamships. These proposals had been submitted to the
+postmaster-general (March 6, 1846) by Edward K. Collins and associates
+(James Brown and Stewart Brown) of New York, and A.G. Sloo of
+Cincinnati: one for mail transportation by steamship between New York
+and Liverpool, semimonthly, the other between New York and New Orleans,
+Havana, and Chagres, twice a month. The secretary was directed to
+contract with Messrs. Collins and Sloo in accordance with the provisions
+laid down in this act. These required that the steamers be built under
+the inspection of naval constructors and be acceptable to the Navy
+Department; that each ship carry four passed midshipmen of the navy to
+serve as watch-officers, and a mail agent approved by the
+postmaster-general. Mr. Sloo's ships for his West India service were to
+be commanded by officers of the navy not below the grade of lieutenant.
+The secretary was further directed to contract for mail-carriage beyond
+the Isthmus,--from Panama up the Pacific coast to some point in the
+Territory of Oregon, once a month each way; but this service could be
+performed in either steam or sailing ships, as should be deemed more
+expedient.[FZ]
+
+All the contracts thus provided for were concluded the same year. Each
+was to run for ten years. The first executed was that with Mr. Sloo. It
+called for five steamships of not less than 1500 tons, and a
+semi-monthly service. The line was to touch at Charleston, if
+practicable, and at Savannah. The ships were to have engines by direct
+action; and each ship was to be sheathed with copper. The subsidy was
+fixed at two hundred and ninety thousand dollars a year, a rate of
+$1.83-1/2 per mile, the distance to be sailed out and back being 158,000
+miles.[GA] Mr. Sloo immediately set over his contract to George Law,
+Marshall O. Roberts, and Bowes McIlvaine, of New York.[GB] The second
+contract was for the Pacific service, connecting with the mail by the
+Sloo line across the Isthmus. This was made with Arnold Harris of
+Arkansas. It provided for a monthly service between Panama and Astoria,
+Oregon, calling at San Diego, Monterey, and San Francisco, with a
+subsidy of one hundred and ninety-nine thousand dollars per annum. Three
+steamers were to be furnished, two of not less than a thousand tons
+each. Upon receiving the contract Mr. Harris immediately transferred it
+to W.H. Aspinwall of New York, representing the newly formed Pacific
+Mail Steamship Company.[GC] The third was the Collins contract. This
+stipulated for a semi-monthly service between New York and Liverpool
+during the eight open months of the year, and a monthly service through
+the four winter months, with five steamers, each of not less than 2000
+tons and engines of a thousand horsepower. The first ship was to be
+ready for service in eighteen months after the date of the contract,
+November 1, 1847. The subsidy was fixed at $19,250 per twenty round
+trips, or three hundred and eighty-five thousand dollars a year, a rate
+of $3.11 a mile for sailing about 124,000 miles.[GD]
+
+By subsequent acts the secretary of the navy was authorized to advance
+twenty-five thousand dollars a month on each of the ships called for by
+these several contracts from the time of their launching to their
+finish; and the date of the completion of the first Collins steamer and
+the opening of the New York and Liverpool service was extended to June
+1, 1850.[GE]
+
+At the same time that the secretary of the navy was executing these
+contracts the postmaster-general under the authority of an act "to
+establish certain Post Routes and for other purposes," also approved
+March 3, 1847,[GF] was contracting for a steamship mail-service between
+Charleston and Havana, with a subsidy of forty-five thousand dollars per
+annum. This contract was entered into with M.C. Mordecai of Charleston,
+who agreed to furnish steamships suitable for war purposes, and to
+perform a monthly service.[GG] Several other propositions for steamship
+service to various foreign countries were made to the postmaster-general
+at this time, but none was accepted.[GH]
+
+The pioneer Bremen-Havre line began its service on the first day of June
+1847, with two steamers. These were the _Washington_ and the _Hermann_,
+built in New York, strong and large, of 1640 tons and 1734 tons,
+respectively, side-wheelers, bark-rigged. At first they made the run to
+Bremen in from twelve to seventeen days, much better time than the
+average clipper.[GI] But up to 1851 they had no regular schedule of
+sailings, and, their speed being unsatisfactory, few mails were sent by
+them. The subsidy payments, therefore, were made for each voyage
+separately.[GJ] They had also ceased to command the patronage of
+travellers. Nevertheless, as a committee of the Senate in 1850 reported,
+they were believed to have been "profitable to their owners as freight
+vessels, and of essential service in promoting the interests of American
+commerce."[GK] The full service, with twelve trips to Bremen and twelve
+to Havre, was finally begun in 1851, when two more, and larger
+ships,--the _Franklin_ and the _Humboldt_, each of 2184 tons, were added
+to the Havre line. Four years before, the original company, because of
+financial difficulties, had organized a separate corporation for the
+Havre service. In 1852 Congress extended the contract to 1857;[GJ] and
+Southampton was made the point of shifting the mails.
+
+The New York and Chagres, the Charleston and Havana, and the Pacific
+line, were all under way before the close of 1848. The Pacific line was
+the first in operation. The service began with the three steamers called
+for by the contract, the first sailing from New York on the sixth of
+October, the other two early in December. They were the _California_,
+1050 tons, the _Panama_, 1087 tons, the _Oregon_, 1099 tons, all built
+in New York. The New York and Chagres line was started also in December
+with the sailing of the _Falcon_, 1000 tons, a purchased steamer which
+the Navy Department accepted temporarily, while the new ships were
+building, that the service might be immediately begun. The opening of
+the new territory south of Oregon acquired through the Mexican War, and
+the beginning of the rush of the "Argonauts" to the newly discovered
+gold fields of California, had made all concerned anxious to get these
+connecting steamship lines a-going.
+
+At first the service was halting because of unavoidable circumstances.
+The Pacific Company were unable at once to meet the demands. Sufficient
+or competent crews could not be obtained on the California coast during
+the gold excitement,[GL] at fever heat in 1849. But it was not long
+before more ships were put on, and the service improved and prospered.
+By September, 1849, the Chagres company had their first completed ship
+in commission. This was the _Ohio_, 2432 tons, built in New York. By
+June, 1850, the second, the _Georgia_ (and the third of the line, for
+the _Falcon_ was retained) was running. Soon afterwards the _Illinois_
+was added. At about the same time the Pacific company had added two more
+to their fleet--the _Columbia_ and the _Tennessee_. In 1851 the
+postmaster-general was authorized to increase the Pacific trips to
+semi-monthly; and the subsidy was increased. An additional contract
+(March 13) was then made with Mr. Aspinwall, as president of the Pacific
+Mail.[GM] This called for the enlargement of the line within a year, to
+six steamers; and for semi-monthly trips from Panama to Oregon and back,
+with stops and mail delivery at named points in California; and
+increased the company's subsidy by one hundred and forty-nine thousand
+two hundred and fifty dollars per annum. Thus the yearly total became
+three hundred and forty-eight thousand two hundred and fifty dollars.
+Before the semi-monthly trips were begun, San Diego and Monterey were
+dropped for the regular service, to be served by a slower line.[GN] Also
+this year (1851) two more steamers were added to the fleet.
+
+By this time on the Atlantic side the Collins Line was in promising
+operation. The service had auspiciously begun in 1850 with four of the
+five steamships called for by the contract. These were the _Atlantic_,
+2845 tons, the _Arctic_, 2856 tons, the _Baltic_, 2723 tons, and the
+_Pacific_, 2707 tons, each some seven hundred tons larger than the
+measurement stipulated--"at least 2000 tons." All were built in New
+York ship-yards; were especially designed for fast sailing; and in size,
+model, finish, and fittings were pronounced to be "such steamers as the
+world had never seen."[GO] In all respects they were superior to the
+Cunarders with which they were aggressively to compete; and it was the
+boast of the Americans that they would "beat the English in steam
+navigation, as they had beaten them in fast sailing." All associated
+with the enterprise were of large experience in maritime affairs. Mr.
+Collins, a native of Truro, Cape Cod, and long a shipping merchant of
+New York, had been at the head of fast clipper-ship lines--the New
+Orleans and Vera Cruz packet line, and the more famous "Dramatic line"
+(the ships named for plays and players) of transatlantic sailers. The
+commanders of the steamers were all tried clipper captains.
+
+The _Atlantic_ made the initial voyage, steaming gallantly out of New
+York harbor on the twenty-seventh of April, a month before the contract
+time for the beginning of the service. The _Pacific_ followed in June,
+the _Baltic_ in November, the _Arctic_ in December. They beat the
+Cunarders' time on the average by a day. Their popularity was
+immediately established. Their passenger traffic rapidly increased. But
+the severe condition of the mail contract, with their quick sailings
+allowing only short stays in port, made it impossible for the company to
+secure a profitable share of the freight business without a heavy outlay
+for slower cargo boats. Within a few months after the start of the line
+the Cunard Company had cut freight rates from seven pounds ten shillings
+per ton to four pounds. So, while the Collins ships continued steadily
+to outsail the Cunarders and got the bulk of the passenger traffic, the
+Cunarders got most of the freighting. Moreover, the Collins ships were
+far more expensive to run. Indeed, the cost of the rapid service was
+enormous. Mr. Collins stated before a committee of Congress that to
+save a day or a day and a half in the run between New York and Liverpool
+cost the company nearly a million dollars annually.
+
+Accordingly more subsidy was asked for. This was granted in 1852, the
+act being stimulated by England's move late in 1851 in raising the
+Cunards' subsidy to L173,340 ($843,000), for forty-four trips a year:
+about nineteen thousand dollars per voyage. The extra allowance lifted
+the Collins subsidy to $853,000 for twenty-six trips a year,
+thirty-three thousand dollars per voyage, a rate of upward of five
+dollars a mile.[GP]
+
+The competition now became sharper. Still the Collins Line maintained
+its record sailings, and continued to beat the English. Then it was
+sharply checked by a grave disaster. On the twenty-fourth of September,
+1854, the _Arctic_, when forty miles off Cape Race, rushing through a
+fog, was rammed by a French steamer, and sunk with three hundred and
+seven souls. This calamity had a depressing effect on the company's
+affairs. Two years later, in 1856, Congress determined to reduce the
+subsidy, and notice of the discontinuance of the extra allowance of 1852
+was ordered.[GQ] Only a few weeks after this action another disaster,
+even more appalling than the first one, befell the company. On September
+23 the _Pacific_ sailed from Liverpool for her homeward voyage with a
+full complement of passengers; passed to sea out of sight; and was never
+more heard of. She was replaced by the _Adriatic_, the fifth ship called
+for by the contract, which was launched the year before, the largest,
+finest, swiftest, and most luxurious then afloat; and the company
+struggled on against accumulating odds.
+
+At length, in 1858, Congress abandoned the subsidy system and returned
+to the method of payment for foreign mail-carriage according to the
+actual service rendered, with a proviso, however, favoring American
+ships, such to receive the inland-postage plus the sea postage, while
+foreign ships were to have the sea postage only.[GR]
+
+This was the final blow. The last voyage of the Collins Line was made
+in January, 1859. Then it perished. In April following, the ships were
+seized by the mortgagees and sold. So closed the career of the pioneer
+United States ship company in the transatlantic service. The splendid
+_Adriatic_ passed to English ownership and the American flag gave way to
+the British. For several years this ship "held the transatlantic record
+with a passage of five days nineteen hours from Galway to St.
+John's."[GS]
+
+Of the other subsidized lines, the ships of the Bremen service were
+withdrawn and laid up after the subsidy ceased. The Havre line continued
+a while longer with two ships that had replaced the _Humboldt_ and the
+_Franklin_, both of which had been lost,--the _Humboldt_ wrecked at
+Halifax on December 5, 1853; the _Franklin_ stranded on Montauk Point on
+July 17, 1854. Then with the charter of the two new steamers by the
+Government in 1861 for use in the Civil War, the Havre line also
+disappeared.
+
+The cost to the Government of this first steamship subsidy venture,
+covering the thirteen years between 1845 and 1858, was approximately
+fourteen and a half million dollars.[GT]
+
+Meanwhile, within this period, the American wooden sailing-ships
+continued to be the glory of the seas, and the American clippers reached
+their highest development. The appearance of steamships on the North
+Atlantic and the Pacific had inspired the producers of the "wonderful
+American sailing-ships" to greater efforts for their perfection; and the
+clipper, surpassing all other types of sailers in size, sea-qualities,
+and speed, was the result of the intensified rivalry of canvas and
+steam.[GU] The American clipper-ship era fairly opened with the advent
+of the Collins Steamship Line.[GV] Between 1850 and 1855 clipper-ships
+were built for nearly every trade,[GW] and they were on every sea. Some
+of the first were employed in the transatlantic packet service. More
+became engaged particularly in the "booming" trade to California, in the
+long-voyage traffic to China and India.[GX] "When John Bull came
+floating into San Francisco, or Sydney, or Melbourne, he used to find
+Uncle Sam sitting carelessly, with his legs dangling over the wharf,
+smoking his pipe, with his cargo sold and his pockets full of
+money."[GY] The Crimean War, 1853-56, opened a new and prosperous market
+for American fast sailing-ships, as transports. To meet the demand
+American ship-yards produced in 1855 more tonnage than they had ever
+built before.[GZ] The sailing-ship interests strenuously opposed the
+subsidy system. They denounced it as class legislation unjustly favoring
+the few, and urged its abolishment.[HA] How strong this influence was in
+bringing about the change in policy is a mooted question.
+
+       *       *       *       *       *
+
+No further move for fostering the American merchant marine with State
+aid directly or indirectly, was made till 1864. Then the
+steamship-subsidizing policy was revived, first with a proposition for
+the establishment of an American mail-line to Brazil. A subsidy of two
+hundred and fifty thousand dollars per year was proposed, one hundred
+and fifty thousand to be paid by the United States and one hundred
+thousand by the Brazilian Government. Congress endorsed the scheme. The
+act embodying it (May 28)[HB] authorized the postmaster-general to
+contract for a monthly service between the two countries, touching at
+St. Thomas, W.I., by first-class American sea-going steamships of not
+less than 2000 tons. The steamers were to be built under naval
+inspection, and to be subject to taking for war service. Bids were to be
+openly advertised for. The contract was to run for ten years. Thus was
+established the pioneer American line between Philadelphia and Rio de
+Janeiro, which continued from 1865 to 1876, and was then abandoned.
+
+In the same session of Congress a bill was introduced, authorizing an
+annual subsidy of five hundred thousand dollars for an ocean
+mail-steamship service to Japan and China via Hawaii. This also received
+favorable consideration, and was passed February 17, 1865. The service
+was to be monthly, performed by American-built ships of not less than
+3000 tons, also constructed under naval inspection. Tenders for the
+contract were to be advertised for, but bids only from United States
+citizens were to be entertained. The contract was to run for ten years.
+Only one bidder appeared (as was evidently expected)--the Pacific Mail
+Steamship Company. The contract went to that company, and under it, in
+1867, their prosperous Asiatic service began. At the outset they were
+released from the obligation of stopping at Hawaii, and Congress voted
+another subsidy--seventy five thousand dollars per annum--for a distinct
+Hawaiian service.[HC] The contract for this service, also advertised
+for, went to the California, Oregon, and Mexican Line.
+
+       *       *       *       *       *
+
+Thus far the granting of postal subsidies for the establishment of
+steamship lines alone had engaged the advocates of State aid to American
+shipping. Now was agitated the institution of a general subsidy system
+as a means of fostering the rehabilitation of the merchant marine of all
+classes in ocean service, sailing-ships as well as steamers. The
+situation had become acute. Through the great loss of tonnage in the
+Civil War, and through the steadily advancing change from wood to iron
+in ship construction and from sail to steam propulsion, the American
+merchant marine had been brought distressingly low. From 1861, when the
+United States was standing second in rank among the nations in the
+extent of her ocean tonnage, to 1866, this tonnage had declined from
+2,642,648 to 1,492,926 tons: a loss of more than forty-three per cent;
+while England, the first in rank and chief competitor, had in the same
+period gained 986,715 tons, or more than forty per cent. Moreover, of
+this increase in English tonnage, a large percentage had been in
+steamers, one ton of which class was estimated to be equal in
+efficiency to three tons of sailing-ships; while, by substituting
+largely iron for wood, England had gained a still further advantage in
+her much larger class of iron vessels, doubly as durable as those of
+wood.[HD]
+
+The matter was brought up in Congress by a resolution of the House,
+March 22, 1869, calling for the appointment of a select committee, "to
+inquire into and report at the next session of Congress the causes of
+the great reduction of American tonnage engaged in the foreign carrying
+trade, and the great depression of the navigation interests of the
+country; and also to report what measures are necessary to increase our
+ocean tonnage, revive our navigation interests, and regain for our
+country the position it once had among the nations as a great maritime
+power." Of this committee Representative John Lynch of Maine was made
+chairman.
+
+The committee gave a series of hearings mainly in Atlantic seaboard
+cities, and submitted their report on February 17, 1870, accompanied by
+two bills recommended for passage; the one, a bounty bill, the other,
+relative to tonnage duties. With these measures the history of years of
+effort to establish the principle of general ship-subsidies in the
+American economic system properly begins.
+
+The Lynch bounty bill, entitled "An act to revive the navigation and
+commercial interests of the United States," made provision for the
+remission of duties upon the raw materials entering into the
+construction of sailing and steam-ships; for the taking in bond, free of
+duty, of all stores used in vessels in sailing to foreign ports; and for
+bounties, or subsidies, to American sailing and steam-ships engaged in
+foreign commerce, already built as well as to be built: the aid being
+extended to those already built because they had been sailed during the
+Civil War and since "at great disadvantage."[HE] The amount of duties to
+be remitted was to be equal to the amount per ton collected on the
+materials required for certain defined classes of ships: on wooden
+vessels, eight dollars a ton; on iron, twelve dollars a ton; on
+composite vessels (vessels composed of iron frames and wooden
+planking), twelve dollars a ton; on iron steamers, fifteen dollars a
+ton. Where American materials were used in the construction of iron or
+composite vessels, allowance was to be made of an amount equivalent to
+the duties imposed on similar articles of foreign manufacture. The
+bounties were thus classified: to owners of American registered ships
+engaging for more than six months in a year in the carrying trade
+between America and foreign ports, or between ports of foreign
+countries, a dollar and a half per ton upon a sailing-ship each year so
+engaged, and a dollar and a half upon a steamer running to and from the
+ports of the British North American provinces; four dollars upon a
+steamer running to and from any European port; and three dollars to and
+from all other foreign ports.[HF]
+
+The intent of the second bill, "imposing tonnage duties and for other
+purposes," was the readjustment of the existing tax upon tonnage so that
+it should fall "more equitably upon the different classes of vessels
+affected thereby."[HF] It removed all tonnage, harbor, pilotage, and
+other like taxes imposed upon shipping by State and municipal authority
+(except wharfage, pierage, and dockage); and imposed a duty of thirty
+cents per ton on all ships, vessels, or steamers entered in the United
+States.
+
+The committee's measures were ably advocated, but they finally went down
+in defeat.
+
+       *       *       *       *       *
+
+In 1872 the Pacific Mail Steamship Company came forward with an offer to
+add another monthly mail-steamship service to Japan and China, for an
+additional subsidy of a half million dollars a year. At the same session
+a project to establish a subsidized line to Australia was introduced;
+another, for a subsidized line from New Orleans to Cuba. These failed,
+while the scheme of the Pacific Mail won. A bill authorizing such
+contract was enacted June 1, that year, after prolonged and warm
+debates, and by close votes in House and Senate. Two years afterwards it
+was discovered that bribery had been employed in securing the passage of
+that act; the charge being that a million dollars had been spent by a
+corrupt lobby in pushing the bill through.[HG] Upon these disclosures,
+and because the company had failed to fulfil its conditions, Congress,
+by act of March 3, 1875, abrogated the contract.[HH] In 1877 the first
+contract with the Pacific Mail for the Japan and China service, expired.
+During its ten years' term the company had received from the Government
+a total of $4,583,333.33.[HI]
+
+With the Pacific Mail exposure the word subsidy became unsavory to the
+public taste, and for some years after no subsidy measure, however
+carefully guarded or respectably backed, could find favor in Congress. A
+second project for subsidizing a new line to Brazil, proposed by John
+Roach, the noted American shipbuilder, in 1879, was among those
+ventured, only to fail.
+
+       *       *       *       *       *
+
+A decade later, in 1889, when conditions seemed to be growing more
+propitious, the subject was revived with vigor by the introduction of a
+navigation subsidy bill proposed by the American Shipping League.[HJ]
+From this evolved in 1890 a tonnage bounty bill reported in the House by
+Representative James M. Farquhar of New York.[HK] The final outcome,
+indirectly, of these moves was the reestablishment of the postal subsidy
+system, abandoned in 1858, in the enactment March 3, 1891, of what is
+known as the Postal Aid Law.
+
+This one ship-subsidy law now on the statutes was in its original draft
+one of two proposed measures, termed respectively the Mail Ship Bill and
+the Cargo Ship Bill, both reported in the Senate by Senator William P.
+Frye of Maine. The Cargo Bill provided for navigation bounties to
+sailing-ships and steamers. The objects of these measures, as stated by
+the promoters, were "(1) to secure regular and quicker service to
+countries now reached; (2) to make new and direct commercial exchanges
+with countries not now reached; (3) to develop new and enlarge old
+markets in the interest of producers and consumers under the
+reciprocity treaties completed and under consideration; (4) to assist
+the promotion of a powerful naval reserve; (S) to establish a
+training-school for American seamen."[HL]
+
+Both bills passed the Senate, but the House rejected the Cargo Bill and
+passed the Mail Bill only after amending it essentially. The subsidy
+rate was cut one-third on steamers of the first class--the highest class
+of ocean liners,[HM]--and was reduced on the second class. The act as
+finally approved comprises the following features:
+
+Empowering the postmaster-general to contract for terms of from five to
+ten years with American citizens for carrying the mails on American
+steamships between ports of the United States and ports in foreign
+countries, the Dominion of Canada excepted; the service on such lines
+"to be equitably distributed among the Atlantic, Mexican Gulf, and
+Pacific ports." Proposals to be invited by public advertisement three
+months before the letting of a contract; and the contract to go to the
+lowest responsible bidder. The steamships employed, to be
+American-built, owned and officered by American citizens; and the
+following proportion of the crews American citizens, to wit: "during the
+first two years of each contract, one-fourth thereof; during the next
+three succeeding years, one-third thereof; and during the remaining time
+of the continuance of such contract, at least one-half thereof." The
+subsidized steamships are ranked in four classes: in the first class,
+iron or steel screw steamships, capable of making a speed of twenty
+knots an hour at sea of ordinary weather, and of a gross tonnage of not
+less than 8,000 tons; second class, iron or steel, speed of sixteen
+knots, 5,000 tons; third class, iron or steel, fourteen knots, 2,500
+tons; fourth class, iron or steel, or wooden, twelve knots, 1,500 tons.
+Only those of the first class eligible to the contract service between
+the United States and Great Britain. All except the fourth class to be
+constructed under the supervision of the Navy Department, with
+particular reference to prompt and economical conversion into auxiliary
+cruisers, of sufficient strength and stability to carry and sustain at
+least four effective rifled cannon of a calibre of not less than six
+inches; and to be of the highest rating known to maritime commerce.
+
+The subsidy, or rate of compensation, as it is termed, for mail-carriage
+is thus fixed in each class: first class, not exceeding four dollars (in
+the original draft six dollars) a mile; second class, two dollars a
+mile, by the shortest practicable route for each outward voyage; third
+class, one dollar a mile; fourth class, two-thirds of a dollar a mile
+for the actual number of miles required by the Post Office Department to
+be travelled on each outward bound voyage. Pro rata deductions from the
+compensations, and penalties, are imposed for omission of a voyage or
+voyages, and for delays or irregularities in service. No steamship in
+the contract service is to receive any other bounty or subsidy from the
+national treasury. Sanction is given to naval officers to volunteer for
+service on the contract mail steamships; and, while so employed, they
+are to receive furlough pay in addition to their steamship pay, provided
+they are required to perform such duties as appertain to the merchant
+service. The training-school for seamen is established by a provision
+requiring that the contract steamers "shall take cadets or apprentices,
+one American-born boy for each thousand tons gross register, and one for
+each majority fraction thereof, who shall be educated in the duties of
+seamanship, rank as petty officers, and receive such pay for their
+services as may be reasonable."[HN]
+
+The first advertisements for proposals under this act resulted in
+contracts with eleven existing lines, of the third and fourth classes.
+No bids were received for the North Atlantic service calling for
+American-built steamships in the first class. But an offer was made by
+the American Line[HO] to begin the performance of the service with two
+British-built liners--the _City of New York_ and the _City of
+Paris_--acquired from the Inman Line, if these steamers were admitted
+to American registry, the company agreeing immediately to order two
+similar ships from American shipyards and add these to their fleet. The
+proposition was accepted, and a supplementary act was passed (May 10,
+1892), legalizing such registry.[HP] The new American ships were
+promptly built,--the _St. Louis_ and the _St. Paul_, launched November,
+1894, and April, 1895, respectively,--each 11,600 tons, "larger,
+swifter, safer, and more luxurious"[HQ] than the two British-built
+vessels: a perfection of workmanship deemed a matter for congratulation
+by patriotic Americans. To this extent at least the subsidy law was
+declared to have been beneficent.
+
+It had become evident, however, that the law was not fostering the
+establishment of new American-owned and American-built steamship lines
+as its promoters had hoped. In 1893 the contract service had been
+reduced by the discontinuance of three of the routes. In 1894 only three
+contracts were in operation. Up to 1898 no lines had been established on
+the Pacific under the law.
+
+In the judgment of the subsidy advocates the law's failure to produce
+the anticipated results only proved its inadequacy in not providing
+enough subsidy. Accordingly, further measures were proposed affording a
+more generous supply.
+
+In December, 1898, Senator Mark Hanna, of Ohio, brought forward a bill
+providing liberal navigation and speed bounties to all American vessels
+engaged in the foreign trade. This measure, as defined by its title,
+proposed "to promote the commerce and increase the foreign trade of the
+United States, and to promote auxiliary cruisers, transports, and seamen
+for Government use when necessary." The subsidy was again termed
+"compensation." It was to be payable on gross tonnage for mileage sailed
+both outward and homeward bound, according to speed. The rate to
+steamships showing on trial test a speed above fourteen knots was to
+increase proportionately; sailing-ships and steamers of less trial speed
+than fourteen knots, were to receive the lowest rate. This was fixed at
+one dollar and fifteen cents per gross ton for each hundred of the
+first fifteen hundred miles sailed both outward and homeward bound, and
+one cent per gross ton for each hundred miles over one hundred miles
+both ways. The additional speed bounties ranged from one cent per gross
+ton for steamers of 1,500 tons and speeding fourteen knots, to 3.2 cents
+for those over 10,000 tons and showing twenty-three knots. The act was
+to be in force for a term of twenty years, and no contracts were to be
+made under it after ten years.
+
+The Hanna bill met strong opposition, and was finally dropped. A
+substitute measure, drawn by Senator Frye, of Maine, took its place.
+This also was lost with the adjournment of the Fifty-seventh Congress.
+At the opening of the next Congress, in December, 1901, Senator Frye
+introduced his bill in an amended form. This offered subsidies to
+contract mail-steamships based upon tonnage and speed, and practically
+restored the rates of the original Postal Aid Bill. It further provided
+a fixed subsidy upon tonnage to other American steamers and
+sailing-ships, registered, and to be built in the United States. The
+bill passed the Senate, but failed with the House.
+
+       *       *       *       *       *
+
+In 1903 the matter was taken up with greater vigor, by President
+Roosevelt. In his annual message to Congress December 7, the President,
+"deeply concerned at the decline of our ocean fleet and the loss of
+skilled officers and seamen," recommended the appointment by Congress of
+a joint commission to investigate and report at the next session, "what
+legislation is desirable or necessary for the development of the
+American merchant marine and American commerce, and, incidentally, of a
+national ocean mail service of adequate auxiliary naval cruisers and
+naval reserves."
+
+In response Congress by act of April 28, 1904, created the Merchant
+Marine Commission with power to make the broadest kind of an inquiry.
+This body was composed of five Senators and five Representatives, two of
+the Senators and two of the Representatives members of the minority
+party. Senator Jacob H. Gallinger of New Hampshire was chairman. Eight
+months between the adjournment and reassembling of Congress was devoted
+to its appointed task. All the larger ports of the country were visited,
+its itinerary embracing the principal cities on the North Atlantic
+seaboard, on the Great Lakes, on the Pacific coast, and on the southern
+coast and Gulf of Mexico. Hearings were given in all these places to
+hundreds of citizens: commercial bodies, shipbuilders, shipowners,
+shipping merchants, merchants in general trade, manufacturers, bankers,
+lawyers, editors, doctrinaires. So wide indeed was the investigation,
+and so liberal the "open door" rule, admitting for consideration any
+"intelligent suggestion offered in good faith," that "alien agents" of
+foreign steamships were heard with the rest.[HR] While differences of
+opinion as to methods and policies naturally were encountered, the
+commission declared that it found public sentiment, as this was sounded
+throughout the United States, "practically unanimous not in merely
+desiring, but in demanding an American ocean fleet, built, owned,
+officered, and so far as may be, manned by our own people." This
+sentiment was "just as earnest on the Great Lakes ... as on either
+ocean."[HR]
+
+The results of the investigation were embodied in an elaborate report,
+comprising majority and minority reports of the commission, and the mass
+of testimony taken at the hearings: the whole filling three large
+pamphlet volumes, in all of nearly two thousand pages.[HS]
+
+The majority reported a bill. This was presented as merely an extension
+of the principles of the Postal Aid Act of 1891, involving "no new
+departure from the established practice of the Government." Its ocean
+mail sections were intended "simply to strengthen the existing act on
+lines where it has happened to prove inadequate." The subsidies which it
+granted were termed, inoffensively, "subventions," and its promoters
+protested that these "subventions" were "not in any opprobrious sense a
+subsidy or bounty." They were "not bounties outright, or mere commercial
+subsidies such as many of our contemporaries give." They were "granted
+frankly in compensation for public services rendered and to be
+rendered."[HT]
+
+The proposed measure, however, was more than an extension of the act of
+1891. Its scope was indicated by its title: "To promote the national
+defence, to create a force of naval volunteers, to establish American
+ocean mail lines to foreign markets, to promote commerce, and to provide
+revenue from tonnage." The subsidies offered comprised mail subventions
+to steamships; subventions to general cargo carriers and deep-sea
+fishing-ships, both steam and sail; and retainers to officers and men of
+American merchant ships and deep-sea fishing vessels enrolling as naval
+volunteers. It opened with provisions for the establishment of a naval
+reserve.
+
+The new mail subsidies provided for ten specified lines of "steamships
+of the United States" of sixteen, fourteen, thirteen, and twelve knots
+speed, to the greater countries of South America, to Central America, to
+Africa, and to the Orient, with a total maximum subsidy for the ten
+lines of $2,665,000 a year. In all contracts it was to be specified that
+the steamships must carry in their own crews a certain increasing
+proportion, up to one-fourth, of men enrolled as naval volunteers. The
+subventions to American general cargo carriers, or the "tramp" type of
+ships, and deep-sea fishing-vessels, steam or sail, were fixed at these
+rates: those engaged in the foreign trade for a full year, five dollars
+per gross ton; so engaged for nine months and less than a year, four
+dollars; for six months, two dollars. These subsidies were conditioned
+upon these requirements: the employment in the crews of a certain
+proportion of naval volunteers; one-sixth of the crews to be citizens of
+the United States or "men who have declared their intentions to become
+citizens;" ships to carry the mails when required free of charge; all
+ordinary repairs to be made in the United States; the ships to be in
+readiness for Government taking for naval service in time of need. The
+payments in this class were to be made on contracts for a year at a
+time, renewable from year to year; and no vessel was to receive them for
+a longer period than ten years. The retainers to officers and men of the
+merchant marine and deep-sea fishing-ships as inducements to enroll as
+naval volunteers, were fixed at rates ranging from a hundred dollars a
+year for the master or chief engineer of a large steamship to
+twenty-five dollars for a sailor or fireman, and fifteen dollars for a
+boy, these retainers being independent of their regular pay. The
+provisions relating to tonnage revenue increased the tonnage taxes on
+all vessels, American and foreign, entering American ports, with a
+rebate of eighty per cent of the tonnage duties allowed to American
+ships carrying American boys as apprentices and training them in
+seamanship or engineering for the merchant service and naval
+reserve.[HU]
+
+The minority report, signed by three of the four Democratic members of
+the commission, although outlining measures of relief which, in the
+judgment of the signers, would "accomplish substantial and permanent
+good without injustice to any other American interest and without doing
+violence to any fundamental principle of right or of organic law,"
+proposed no bill. While the minority "saw objections to the entire bill"
+recommended by the majority, they were disposed to withhold any
+opposition except to the sections providing for direct subsidies. These
+they declared to be "so obnoxious to Democratic principles and to the
+economic sense of the country" that they were compelled to enter their
+"earnest protest against their enactment into law." Instead of
+subsidies, the remedial legislation which they outlined included: a
+return to the discriminating-duty policy; and the putting on the free
+list of all materials which enter into the construction of ships no
+matter whether intended for foreign or domestic trade,--thus admitting
+ships built from foreign materials, in whole or in part, to the
+coastwise trade, from which they are now excluded. The minority held
+also that it would probably "be necessary to remove the duties not only
+for materials but from all materials sold cheaper abroad than at home,"
+meaning steel and iron products. "In this way, and in this way only,
+will our shipbuilders be enabled to obtain our materials at the prices
+at which they are sold to foreign shipbuilders."[HV]
+
+The report of the commission was submitted to the Fifty-eighth Congress,
+third session, January 4, 1905.[HW] No action was had on the bill in
+that Congress. It was referred to the committee on commerce; reported
+back to the Senate with sundry amendments and a minority report against
+it;[HX] was debated tentatively; and finally passed over at the request
+of its sponsor, Senator Gallinger, who expressed himself as satisfied
+that the bill could not receive the consideration it deserved at that
+session. Meanwhile both Houses had directed a continuance of the
+commission's inquiry. In May the chairman, Senator Gallinger, held
+conferences in New York with several representatives of the shipping
+interests who had not been heard; and later sessions were held in
+Washington, at which other statements were received and considered.
+
+At the opening of the Fifty-ninth Congress, December 4, 1905, Senator
+Gallinger submitted a supplementary report of the commission, and with
+it introduced a new bill--the previous bill in a new draft.[HY] At the
+same time Representative Charles H. Grosvenor, of Ohio, the first House
+member of the commission, introduced the bill to the House.
+
+This draft added several new features to the original bill. The most
+important were provisions for increasing the subsidies payable under the
+law of 1891 to the single American contract line to Europe, and to the
+Oceanic Line from San Francisco to Auckland and Sydney. These provisions
+added two hundred and fifty thousand dollars to the former's subsidy of
+seven hundred and fifty thousand, and two hundred and seventeen thousand
+to the latter's of two hundred and eighty-three thousand. The reasons
+given for these increases were: in the case of the American Line,
+because this line "meets the fiercest competition of the State-aided
+corporations of Europe, soon to be intensified by the new subvention of
+one million one hundred thousand dollars granted to the Cunard Company
+by the British Government, on terms so liberal as to make it equivalent
+to one and a half million dollars a year"; and in the case of the
+Australasia Line, because it "operates in Pacific waters where cost of
+fuel, labor, etc., is considerably greater than at Atlantic ports; ...
+is required to maintain a very high speed; ... employs exclusively white
+crews instead of the Asiatics utilized by many other Pacific companies."
+Another provision, as a special encouragement for American shipowners to
+enter the Philippine trade, added a subvention of thirty per cent above
+the regular rate, or six and a half dollars a ton. The naval volunteer
+retainers were extended to seamen of the Great Lakes and coastwise
+trade.[HZ]
+
+In the Senate the bill fared well as a whole. Like the original bill it
+came back from the committee on commerce amended, though slightly, and
+with a minority report against it: the minority again emphasizing their
+"unqualified opposition to this renewed effort to donate to certain
+favored interests moneys collected by the Government for public purposes
+under its power of taxation."[IA] It was closely fought by the
+opposition in debate, opened with Senator Gallinger's argument in its
+behalf on January 8, 1906. But it successfully ran the gauntlet. Further
+amended in several particulars, but unscathed in its essential parts, it
+passed the Senate, February 14, by a vote of 38 to 27, five Republican
+Senators and all the Democrats voting in the negative.[IB]
+
+In the House its progress was less prosperous. It lay with the committee
+on merchant marine and fisheries into the second session of this
+Congress; and more hearings were given. Reframed after the enacting
+clause, but practically the same in principle, it was reported back
+January 19 (1907) by Mr. Grosvenor, accompanied by an explanatory
+report of the majority of the committee;[IC] and bill and report were
+referred to the whole House on the state of the Union. Later the views
+of the minority were filed.[IC] On January 23 a message from President
+Roosevelt in behalf of the measure was received. The president
+particularly urged the "great desirability of enacting legislation to
+help American shipping and American trade by encouraging the building
+and running of lines of large and swift steamers to South America and
+the Orient." As striking evidence of the "urgent need of our country's
+making an effort to do something like its share of its own carrying
+trade on the ocean," he directed attention to the address of Secretary
+Root before the Trans-Mississippi Commercial Congress at Kansas City,
+Mo., the previous November, giving the results of the secretary's
+experiences on his recent South American tour. The proposed law, Mr.
+Roosevelt repeated, was in no sense experimental. It was "based on the
+best and most successful precedents, as for instance on the recent
+Cunard contract with the British Government." So far as South America
+was concerned, its aim was to "provide from the Atlantic and Pacific
+coasts better American lines to the great ports of South America than
+the present European lines." Under it "our trade friendship" would "be
+made evident to the South American Republics."[ID]
+
+Backed by the explanatory report and this message, the friends of the
+measure opened the debate, February 25, Mr. Grosvenor leading. It was a
+great debate, long and hot. Numerous amendments were put in; some
+changing the proposed routes, others adding new ones. At length on March
+1, three days before the end of this Congress, the much amended bill was
+passed, and went back to the Senate for concurrence.[IE]
+
+As it now stood it was shorn of the provisions for lines from the
+Pacific coast to Japan, China, the Philippines, and Australasia. The new
+subsidized lines were all to run to South America. Two of these were to
+run from the Atlantic coast to Brazil and Argentina, respectively; one,
+from the Pacific coast to Peru and Chile; and one from the Gulf of
+Mexico to Brazil. On all four lines sixteen-knot steamers were required,
+with speed on the average above the European mail lines to South
+America. The subsidies were reserved exclusively to ships to be built in
+the United States, so that the mail service could not be performed by
+existing steamers; thus a wholly new ocean-mail fleet was
+guaranteed.[IF]
+
+The bill was reached in the Senate March 2, and strenuous efforts were
+made by Senator Gallinger and others to push it through. But it failed
+in the closing hours of the session to reach a vote. So this measure
+fell.[IG]
+
+Another effort was made in the Sixtieth Congress. In his message at the
+beginning of this Congress (December 2, 1907) President Roosevelt
+recommended an amendment to the act of March 3, 1891, "which shall
+authorize the postmaster-general in his discretion to enter into
+contracts for the transportation of mails to the Republics of South
+America, to Asia, the Philippines, and Australia at a rate not to exceed
+four dollars a mile for steamships of sixteen-knots speed or upward,
+subject to the restrictions and obligations" of that act. In other
+words, to give the same subsidy to steamers in these services as allowed
+to the twenty-knot American mail transatlantic line, instead of two
+dollars a mile.[IH] A bill to this effect was introduced in the Senate
+December 4[II]; on February 3, 1908, was reported back from the
+committee on commerce so amended as to provide the four-dollar-a-mile
+subsidy to American sixteen-knot steamers on routes of four thousand
+miles or more to South America, the Philippines, Japan, China, and
+Australasia; was debated at length; further amended; and finally,
+passed, March 20. In the House it was referred to the committee on post
+office and post roads;[IJ] issued therefrom in a dew draft;[IK] debated;
+and finally failed to pass. Thereupon the subsidized service to
+Australia by way of Honolulu and the Samoan group was abandoned.
+
+Again the measure was pressed in the Sixty-first Congress. It now had
+the backing of President Taft. In his annual message December 9, 1909,
+"following," as he graciously said, "the course of my distinguished
+predecessor," he earnestly recommended the passage of a "ship-subsidy
+bill looking to the establishment of lines between our Atlantic seaboard
+and the eastern coast of South America, China, Japan, and the
+Philippines." The bill, as introduced by Senator Gallinger (February 23,
+1910), provided for subsidized lines of the second and third classes on
+routes to the points named by Mr. Taft, four thousand miles or more in
+length outward voyage, or on routes to the Isthmus of Panama: the second
+class to receive the subsidy rate per mile provided in the law of 1891
+for steamers of the first class, and the third class the rate applicable
+to the second class. If no contract should be made for a line between a
+Southern port and South American ports, and two or more should be
+established from Northern Atlantic ports, it was required that one of
+the latter should touch outward and homeward at two ports of call south
+of Cape Charles. The total expenditure for foreign mail-service in any
+one year was limited--not to exceed the estimated revenue therefrom for
+that year.[IL]
+
+The bill came back from the committee on commerce in March without
+amendment, and with a report.[IM] In June it was put over for
+consideration in December of the third session of this Congress. When at
+length it was reached, Senator Gallinger submitted a substitute. This,
+instead of naming the points to be covered, provided for subsidized
+routes to South America south of the equator outward voyage; provided
+for one port of call instead of two on the Southern Atlantic coast;
+guarded against "discrimination detrimental to the public interest," in
+other words "combines," by a provision that no contract be awarded to
+any bidder engaged in any competitive transportation business by rail,
+or in the business of exporting or importing on his own account, or
+bidding for or in the interest of any person or corporation engaged in
+such business, or having control thereof through stock ownership or
+otherwise; and fixed the limit of the total expenditure for foreign mail
+service in any one year at four million dollars. This substitute was
+finally passed on February 12, 1911, by a vote of 39 to 39, the chairman
+casting his vote in the affirmative. In the House the measure went to
+the committee on post office and post roads; and there rested.
+
+Various other subsidy bills and measures for the revival of the ocean
+merchant marine without subsidies, were put into this Congress, as in
+previous ones, but few escaped from the committees; and these few fell
+short of passage.
+
+FOOTNOTES:
+
+[Footnote FS: Wells, chaps. 4 and 5, pp. 58-94. Also Rept. of
+commissioner of navigation for 1909.]
+
+[Footnote FT: U.S. Statutes at Large. Also Rept. of commission of
+navigation, 1909.]
+
+[Footnote FU: Marvin, pp. 240-241.]
+
+[Footnote FV: U.S. Statutes at Large, vol. V, p. 748.]
+
+[Footnote FW: This contract in Executive Document, 30th Cong., 1st sess,
+no. 50.]
+
+[Footnote FX: U.S. Statutes at Large, vol. IX, p. 152.]
+
+[Footnote FY: Meeker.]
+
+[Footnote FZ: U.S. Statutes at Large, vol. IX, p. 187.]
+
+[Footnote GA: Meeker.]
+
+[Footnote GB: For the Sloo contract see Exec. Does., 32nd Congr., 1st
+sess., no. 91.]
+
+[Footnote GC: For this contract see Exec. Docs., 32nd Cong., 1st sess.,
+no. 91.]
+
+[Footnote GD: Meeker. This contract in Exec. Docs., 32nd Cong., 1st
+sess., no. 91, pp. 71-74.]
+
+[Footnote GE: Navy appropriation bills, Aug. 3, 1848, March 3, 1849.]
+
+[Footnote GF: U.S. Statutes at Large, vol. IX, p. 188.]
+
+[Footnote GG: Exec. Docs., 30th Cong., 1st sess., no. 51.]
+
+[Footnote GH: Exec. Docs., 30th Cong., 1st sess., no. 51.]
+
+[Footnote GI: Marvin, p. 243.]
+
+[Footnote GJ: Meeker.]
+
+[Footnote GK: Report in the Senate Sept. 18, 1850, in Exec. Docs., 32nd
+Cong., 1st sess., no. 91, pp. 14-15.]
+
+[Footnote GL: Meeker.]
+
+[Footnote GM: For contract see Exec. Docs., 32nd Cong., 1st sess., no.
+91, pp. 154-157.]
+
+[Footnote GN: Exec. Docs., 32nd Cong., 1st sess., no. 91, pp. 5-7.]
+
+[Footnote GO: Marvin, p. 247. The measurement of these steamers is
+differently given by Spears: p. 26. "When done, the ships were found to
+have fine models--they rode the waves in a way that excited the
+admiration of all sailors. But the keelsons under the engines were only
+40 inches deep, while the keels were 277 ft. long, and there was 'give'
+enough to rack the engines to pieces." Spears, p. 267.]
+
+[Footnote GP: Meeker.]
+
+[Footnote GQ: U.S. Statutes at Large, vol. XI, p. 101; chap. CLXI, Aug.
+18, 1856.]
+
+[Footnote GR: Same appropriation act for ocean steamship service, June
+14, 1858.]
+
+[Footnote GS: Marvin, p. 279.]
+
+[Footnote GT: Meeker gives the details as follows: Bremen line (1847-57)
+$2,000,000; Havre line (1852-57) $750,000; Collins line (1850-58)
+$4,500,000; New York to Aspinwall (1848-58) $2,900,000; Astoria and San
+Francisco to Panama (1848-58) $3,750,000; Charleston to Havana (1848-58)
+$500,000.]
+
+[Footnote GU: Marvin, p. 253.]
+
+[Footnote GV: Bates, p. 133.]
+
+[Footnote GW: Same, p. 143.]
+
+[Footnote GX: Marvin, p. 254.]
+
+[Footnote GY: George Frisbie Hoar.]
+
+[Footnote GZ: Marvin, p. 258.]
+
+[Footnote HA: Bates, p. 142.]
+
+[Footnote HB: United States Statutes at Large, vol. XIII, p. 93.]
+
+[Footnote HC: Session of 1866-67.]
+
+[Footnote HD: Report of the select committee on the merchant marine, in
+Repts. of Committee, 1870, 41st Cong., 2d Bess., House Kept., no. 28.]
+
+[Footnote HE: House Rept., no. 2378, 51st Cong., 2nd sess.]
+
+[Footnote HF: House Report, no. 28, 41st Cong., 2d sess.]
+
+[Footnote HG: House Docs., no. 598, also Miscellaneous Docs.; nos. 74
+and 255, 42d Cong., 2nd sess.]
+
+[Footnote HH: House Docs., no. 268, 43rd Cong., 1st sess.]
+
+[Footnote HI: Meeker.]
+
+[Footnote HJ: House Docs., Rept., no. 601, 51st Cong., 1st sess.]
+
+[Footnote HK: Text of this bill in Bates, pp. 411-416.]
+
+[Footnote HL: House Rept., no. 3273, 51st Cong., 2d sess.]
+
+[Footnote HM: Marvin, p. 414.]
+
+[Footnote HN: United States Statutes at Large, vol. XXVI, p. 830.]
+
+[Footnote HO: Originally the International Navigation Company
+established in Philadelphia in 1871, and beginning service between
+Philadelphia and Liverpool with four American-built steamships.]
+
+[Footnote HP: United States Statutes at Large, vol. XXVII, p. 27.]
+
+[Footnote HQ: Marvin, p. 421.]
+
+[Footnote HR: Report of The Merchant Marine Commission (1904), vol. I,
+p. III.]
+
+[Footnote HS: Report of The Merchant Marine Commission, together with
+the testimony taken at the Hearings, 3 Vols., p. 1985; Senate Report,
+no. 2755, 58th Cong., 3d sess.]
+
+[Footnote HT: Same: Report of the majority, vol. I, pp. XXIII, XXX,
+XXXI.]
+
+[Footnote HU: This bill in Report of the Merchant Marine Commission,
+vol. I, pp. XLVI, LI.]
+
+[Footnote HV: Rept. of The Merch. Marine Com., Views of the Minority,
+Vol. I, p. LVI.]
+
+[Footnote HW: Senate bill, 6291, 58th Cong., 3d sess.]
+
+[Footnote HX: Senate Report no. 2949, 58th Cong., 3d sess.]
+
+[Footnote HY: Senate Report no. 1, 59th Cong., 1st sess.]
+
+[Footnote HZ: Senate Report no. I, 59th Cong., 1st sess. This bill is
+Senate no. 529.]
+
+[Footnote IA: Senate Report no. 10, 59th Cong., 1st sess.]
+
+[Footnote IB: Cong. Record, vol. 40, part I, 59th Cong., 2d sess.]
+
+[Footnote IC: House Report no. 6442, 59th Cong., 2d sess.]
+
+[Footnote ID: House Doc. no. 4638, 59th Cong., 2d sess.]
+
+[Footnote IE: Cong. Record, vol. 41, part 5, 59th Cong., 2d sess., p.
+4378.]
+
+[Footnote IF: Cong. Record, 59th Cong., 2d sess., p. 4688.]
+
+[Footnote IG: Same, p. 4653.]
+
+[Footnote IH: Senate Report no. 168, 60th Cong., 1st sess.]
+
+[Footnote II: Senate bill no. 28, 60th Cong., 1st sess.]
+
+[Footnote IJ: Cong. Record, 65th Cong., p. 3743.]
+
+[Footnote IK: House bill no. 22301, 60th Cong., 1st sess.]
+
+[Footnote IL: Senate bill no. 6708, 60th Cong., 2d Sess.]
+
+[Footnote IM: Senate Report no. 354, same.]
+
+
+
+
+CHAPTER XIV
+
+SUMMARY
+
+
+Ship subsidies, open or concealed, are now granted by nearly every
+maritime nation. Whatever may be the designation of these Government
+grants,--whether mail subsidies, naval subventions, retaining fees for
+possible naval service, construction bounties, navigation bounties,
+trade bounties, Government loans, Government partnerships, tariff
+advantages, canal refunds,--whatever may be their form, all are
+distinctly Government aids, direct or indirect, the primary object of
+which is the development and expansion of the merchant marine of each
+nation granting them; and generally, if not universally, the upbuilding
+of this marine for service in time of need as an auxiliary to the
+national navy.
+
+Summarized, the various grants of the various nations thus appear:
+
+_Great Britain_ grants mail subsidies, and admiralty subventions; her
+colonies, steamship subsidies.
+
+_France_: mail subsidies; construction and navigation bounties;
+fisheries bounties.
+
+_Germany_: mail subsidies; steamship subsidies; preferential rates on
+the State railroads for shipbuilding materials.
+
+_Belgium_: premiums to certain steamship lines; pilotage refunds.
+
+_Austria-Hungary_: mail subsidies; construction and navigation bounties;
+Suez Canal refunds. Hungary; bounties to Hungarian ships.
+
+_Italy_: mail subsidies; construction and navigation bounties.
+
+_Spain_: mail subsidies; construction and navigation bounties.
+
+_Portugal_: mail subventions to steamship companies.
+
+_Denmark_: trade subsidies; exemptions from harbor dues.
+
+_Sweden_: State contributions--loans to steamship companies.
+
+_Norway_: State contributions; trade subsidies.
+
+_Russia_: mail subsidies; mileage subsidies; Government loans; steamship
+subsidies; Suez Canal refunds.
+
+_Japan_: State aid to steamship companies; mail subsidies; construction
+and navigation bounties; fisheries bounties.
+
+_China_: State aid to steamship companies; subsidies to ship-yards.
+
+_South America_: Brazil and Argentina, subsidies to foreign steamship
+companies.
+
+_United States_: mail subsidies to seven steamship lines.
+
+The United States confines the coastwise trade to American ships, and
+these are exempted from tonnage dues. It excludes foreign-built ships
+from American registry, admitting only American ships, or those taken in
+war as prizes or forfeited for a breach of United States laws, belonging
+to American citizens.[IN] Ownership of American ships is restricted to
+"citizens of the United States, or a corporation organized under the
+laws of any of the States thereof."[IO] The master of an American ship,
+and all officers in charge of a watch, including the pilots, must be
+American citizens. Since 1871 foreign materials for ship-building have
+been admitted free of duty. Since 1909 such materials, and all articles
+necessary for the outfit and equipment of ships, have been duty-free,
+with this proviso: that vessels receiving these rebates of duties "shall
+not be allowed to engage in the coastwise trade of the United States
+more than six months in any one year," except upon repayment of the
+duties remitted; and that vessels built for foreign account and
+ownership shall not engage in this trade.[IP]
+
+In 1910 the subsidized American service covered only the one
+transatlantic line from New York to Southampton, calling at Plymouth and
+Cherbourg; lines to the north coast of South America--to Venezuela; to
+Mexico; to Havana; to Jamaica; and on the Pacific, from San Francisco to
+Tahiti.
+
+The total cost of the service for the year on these seven subsidized
+routes was $1,114,603.47, a net excess over the amount allowable at
+present rates to steamers not under contract of $346,677.39, or,
+deducting the amount would have been paid non-contract steamers for the
+despatch of the foreign closed mails which these steamers carry without
+additional cost to the department, a total excess of $293,013.40.[IQ]
+"All other mail service between the United States and foreign
+countries," the postmaster-general regretfully reported, is "wholly
+dependent on steamships over whose sailings the department has no
+control."[IR]
+
+       *       *       *       *       *
+
+The total tonnage of the United States in 1910 as given by Lloyd's was
+5,058,678 tons:
+
+                              No. of vessels.     Tons.
+
+Sea                                 2774        2,761,605
+Northern Lakes                       606        2,256,619
+Philippine Islands                    89           40,454
+                                    ----        ---------
+  Total                             3469        5,058,678
+
+The number of ships on the lakes as given does not include wooden
+vessels trading on the Great Lakes. While the ocean tonnage has declined
+from more than two and a half million tons in 1861 to some eight hundred
+thousand tons, that engaged in the coastwise and inland trade has
+steadily increased for many years.[IS] On the Great Lakes especially is
+employed a fine and powerful merchant fleet.
+
+
+THE END.
+
+FOOTNOTES:
+
+[Footnote IN: Registry law of 1792, in Revised Statutes, sec. 4132.]
+
+[Footnote IO: Revised Statutes, see. 4131.]
+
+[Footnote IP: Tariff act of Aug. 5, 1909, sec. 19.]
+
+[Footnote IQ: Postoffice Department report, 1910.]
+
+[Footnote IR: Postmaster-general Hitchcock, report, 1910.]
+
+[Footnote IS: American Year Book, 1911.]
+
+
+
+
+INDEX
+
+  _Adriatic_, the steamer,
+
+  American Shipping League,
+
+  American Steamship Company,
+
+  American Year Book, _reference to_,
+
+  Anderson, Com. Gen. George E., _reference to_,
+
+  _Arctic_, the steamer,
+
+  _Argentina_, use of subsidies in,
+
+  Aspinwall, W.H.,
+
+  _Atlantic_, the steamer,
+
+  Atlantic Transport line,
+
+  _Auguste Victoria_, the steamer,
+
+  Australasia line,
+
+  Australian line,
+
+  Austria-Hungary, history of the use of subsidies in,
+    provisions for two classes of subsidies in,
+    increase in the proportion of steamers built in,
+    total of tonnage in,
+    grants of,
+
+  Austrian Lloyd Company,
+
+  Austro-American Shipping Company,
+
+  Austro-Hungarian Lloyd Company, _see_ Austrian Lloyd Company.
+
+
+  BABBITT, VICE CON. GEN. E.G., _reference to_,
+
+  _Baltic_, the steamer,
+
+  Barker, J. Ellis, _reference to his_ "Modern Germany,"
+
+  Bates, W.W., _reference to his_, "American Marine,"
+
+  Belgium, use of subsidies in,
+
+  Bismarck's Memorial to the German Reichstag, _reference to_,
+
+  Black Sea Navigation Company,
+
+  Brazil, use of subventions in,
+
+  _Britannia_, the steamer,
+
+  Brown, James,
+
+  Brown, Stewart,
+
+
+  _California_, the steamer,
+
+  Canada, granting of mail and steamship subsidies by,
+
+  Cargo Ship Bill, the,
+
+  Charleston and Havana line,
+
+  _Chargeurs Reunis_,
+
+  Chile, use of mail subsidies,
+
+  China, use of subsidies in,
+
+  Chinese Merchants' Steam Navigation Company,
+
+  _City of New York_, the steamer,
+
+  _City of Paris_, the steamer,
+
+  "Clippers," American,
+
+  Colbert, finance minister of France,
+
+  Collins, Edward K.,
+
+  Collins line, the,
+
+  _Columbia_, the steamer,
+
+  _Campagnie des Messageries Maritimes_,
+
+  _Compagnie Fraissant_,
+
+  _Compagnie Generale Transatlantique_,
+
+  Compania Transatlantica Espanola, La,
+
+  Cromwell, code of, _see_ Maritime Charter of England, Great,
+
+  Cunard, Samuel,
+
+  Cunard Company,
+
+  _Curacoa_, the steamer,
+
+
+  DAWSON, GEN. WILLIAM, JR., _reference to_,
+
+  Denmark, granting of postal subventions and "trade" subsidies by,
+
+  Dominion line,
+
+  "Dramatic line,"
+
+  Dutch East Indian lines,
+
+
+  EAST AFRICAN LINE,
+
+  East Asian line,
+
+  England, history of the use of subsidies in,
+    first navigation law of,
+    Great Maritime Charter of,
+    Cromwell's code for,
+    competition between the United States and,
+    testing of steam for navigation in,
+    building of steamships,
+    total of subsidies paid in,
+    grants of,
+
+
+  _Falcon_, the steamer,
+
+  Farquhar, James M.,
+
+  France, history of the use of subsidies in,
+    the navigation laws of,
+    the disappearance of the domestic mercantile marine of,
+    commercial treaty between England and,
+    the Merchant Marine Act of,
+    organization of steamship companies in,
+    granting of "shipping premiums" in,
+    total cost of bounty system in,
+    capacity of, for building steamships,
+    grants of,
+
+  _Franklin_, the steamer,
+
+  Frye, William P.,
+
+
+  GAFFNEY, T. ST. J., U.S. Consul,
+
+  Gallinger, Jacob H.,
+
+  _Georgia_, the steamer,
+
+  German-Australian line,
+
+  Germany, history of the use of subsidies in,
+    first steps in domestic shipbuilding in,
+    establishment of a subsidized mail service in,
+    building of large steamships in,
+    extraordinary growth of the merchant marine in,
+    grants of,
+
+  _Great Britain_, the steamer,
+
+  _Great Western_, the steamer,
+
+  Great Western Steamship Company,
+
+  Green, John R., _reference to his_ "Short History of the English
+    People,"
+
+  Greener, Gen. R.T., U.S. Con., _reference to_,
+
+  Grosvenor, Charles H.,
+
+
+  HAMBURG-AMERICAN lines,
+
+  Hanna, Mark,
+
+  Harris, Arnold,
+
+  _Hermann_, the steamer,
+
+  Hitchcock, Postmaster-General, _reference to_ Report of,
+
+  Hoar, George Frisbie,
+
+  Holland, maritime supremacy of,
+    granting of subventions for carrying mails in,
+
+  _Humboldt_, the steamer,
+
+  Hungary, _see_ Austria-Hungary
+
+
+  _Illinois_, the steamer,
+
+  _Indiana_, the steamer,
+
+  Inman, John,
+
+  "Inman Line,"
+
+  "International Mercantile Marine Company,"
+
+  International Navigation Company, _see_ American Line
+
+  Italian General Navigation Company,
+
+  Italy, history of the use of subsidies in,
+    construction, subsidies provided for in,
+    mail subvention system of,
+    increase of tonnage in,
+    grants of,
+
+
+  JAPAN, history of the use of subsidies in,
+
+  Japan Mail Steamship Company, _see, Nippon Yusen Kaisha_, the
+
+  Japan Year Book, _reference to_,
+
+  Jwasaki Yataro, the Japanese merchant,
+
+
+  LAW, GEORGE,
+
+  Lindsay, W.H., _reference to his_ "History of Merchant Shipping,"
+    _also his_, "Our Navigation Laws,"
+
+  _Lloyd Brazileiro_, the,
+
+  Lloyd Italiano line,
+
+  Lloyd's Register, _reference to_,
+
+  _Lusitania_, the steamer,
+
+  Lynch, John,
+
+  Lynch bounty bill,
+
+
+  MACGREGOR, JOHN, _reference to his_, "Commercial Tariffs,"
+
+  Mellvaine, Bowes,
+
+  Mail Ship Bill, the,
+
+  Maritime Charter of England, Great,
+
+  Marvin, Winthrop L., _reference to his_ "American Merchant
+    Marine,"
+
+  _Mauretania_, the steamer,
+
+  Meeker, Royal, _reference to his_ "History of Ship Subsidies,"
+
+  Merchant Marine Commission, the,
+
+  Miller, Con. Gen. H.B., _reference to_,
+
+  Mills, Edward,
+
+  Mordecai, M.C.,
+
+  Morgan, J. Pierpont,
+
+  "Morgan Steamship Merger," _see_ "International Mercantile Marine
+       Company"
+
+  NAVIGATION, Report of (U.S.) commissioner of, _reference to_,
+
+  Navigation law, first English,
+
+  New Orleans packet line,
+
+  New York, Havre, and Bremen line,
+
+  New York and Chagres line,
+
+  _Nippon Yusen Kaisha_, the,
+
+  North German Lloyd line,
+
+  Norway, granting of subsidies for mail carriage by,
+
+
+  O'BRIEN; THOMAS, U.S. Ambassador, _reference to_,
+
+  Ocean Steam Navigation Company,
+
+  _Ohio_, the steamer,
+
+  _Olympic_, the steamer,
+
+  _Oregon_, the steamer,
+
+
+  _Pacific_, the steamer,
+
+  Pacific Mail Steamship Company,
+
+  Pacific Steam Navigation Company,
+
+  _Panama_, the steamer,
+
+  Parliamentary papers, _reference to_,
+
+  _Pennsylvania_, the steamer,
+
+  Portugal, granting of postal subventions and subsidies by,
+
+  Postal Aid Law, the,
+
+  Postal Ocean Steamship Company,
+
+  Preble, George H., _reference to his_, "Chronological History of
+    Steam Navigation,"
+
+  _Princeton_, sloop-of-war, the,
+
+
+  RED STAR LINE,
+
+  Ricardo, John Lewis, _reference to his_, "Anatomy of the Navigation
+    Laws,"
+
+  Roach, John,
+
+  Roberts, Marshall O.,
+
+  Roosevelt, President,
+
+  Root, Secretary,
+
+  Royal Mail Steam Packet Company,
+
+  _Royal William_, the steamer,
+
+  Russia, history of the use of subsidies in,
+    proposed granting of bounties in the form of loans,
+    increase in the fleet of,
+    grants of,
+
+  Russian Volunteer Fleet,
+
+
+  ST. GEORGE'S PACKET COMPANY,
+
+  _St. Louis_, the steamer,
+
+  _St. Paul_, the steamer,
+
+  Sammons, Thomas, U.S. Con. Gen.,
+
+  _Savannah_, the first steamer to cross the Atlantic,
+
+  Shipbuilding, in the United States,
+    in England,
+    in France,
+    in Germany,
+    in Austria-Hungary,
+    in Spain,
+    in Russia,
+    in Japan,
+    in the United States,
+
+  _Sirius_, the steamer,
+
+  Sloo, A.G.,
+
+  Skinner, Robert, U.S. Consul,
+
+  Small, Consul General, _reference to_,
+
+  Smith, U.S. Consul, _reference to_,
+
+  Snodgrass, Con. Gen. John H., _reference to_,
+
+  South America, use of subsidies in,
+
+  Spain, history of the use of subsidies in,
+
+  Spears, John R., _reference to his_ "Story of the American Merchant
+    Marine,"
+
+  Subsidy, definition of term,
+    various forms of,
+    use of, in England,
+    in Canada,
+    in France,
+    in Germany,
+    in Holland and Belgium,
+    in Austria-Hungary,
+    in Italy,
+    in Spain,
+    in Portugal,
+    in Denmark, Norway, and Sweden,
+    in Russia,
+    in Japan,
+    in China,
+    in South America,
+    in the United States,
+    summary of,
+
+  Sweden, granting of subsidies for mail carriage by,
+
+
+  TAFT, PRESIDENT,
+
+  _Tennessee_, the steamer,
+
+
+  UNION MARITIME COMPANY,
+
+  United States, competition in the overseas between England and the,
+    history of the proposed system of ship subsidies in the,
+    establishment of mail steamers in the,
+    the "clippers" of the,
+    revival of the steamship-subsidizing policy in the,
+    condition of the merchant marine in the,
+    bills in Congress relative to bounties in the,
+    grants of the,
+    ownership of ships in the,
+    subsidized service of, in 1911,
+    total tonnage of the,
+
+
+  VAN TROMP, the Dutch admiral,
+
+  Vera Cruz packet line,
+
+  Viallates, Achille, _reference to_,
+
+
+  _Washington_, the steamer,
+
+  Wells, David A., _reference to his_ "Our Merchant Marine,"
+
+  Wheelwright, William,
+
+  White Star Line,
+
+  Wood, J.K., U.S. Consul, _reference to_,
+
+
+
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