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diff --git a/.gitattributes b/.gitattributes new file mode 100644 index 0000000..6833f05 --- /dev/null +++ b/.gitattributes @@ -0,0 +1,3 @@ +* text=auto +*.txt text +*.md text diff --git a/13718-0.txt b/13718-0.txt new file mode 100644 index 0000000..37c6873 --- /dev/null +++ b/13718-0.txt @@ -0,0 +1,4012 @@ +*** START OF THE PROJECT GUTENBERG EBOOK 13718 *** + +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 _CuraƧoa_, 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 preĆ«minent.[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 +ViallatĆ©s 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 ViallatĆ©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.[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 ViallatĆ©s 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 ViallatĆ©s +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 ViallatĆ©s 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 ViallatĆ©s: + + "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 GĆ©nĆ©rale Transatlantique_, the +_Compagnie des MessagĆ©ries Maritimes_, the _Chargeurs RĆ©unis_, 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 ViallatĆ©s, "How France Protects Her Merchant +Marine," in North American Review, vol. 184, 1907.] + +[Footnote BJ: Lindsay, vol. III.] + +[Footnote BK: Lindsay, vol. III, also ViallatĆ©s.] + +[Footnote BL: ViallatĆ©s.] + +[Footnote BM: Lindsay, vol. III, pp. 457-458.] + +[Footnote BN: ViallatĆ©s.] + +[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: ViallatĆ©s.] + +[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: ViallatĆ©s.] + +[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 ViallatĆ©s, 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 reĆ«nactment 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 CompaƱia Transatlantica EspaƱola_. + +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 Ā£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 reĆ«stablishment 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 RĆ©unis_, + + 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 MessagĆ©ries Maritimes_, + + _Compagnie Fraissant_, + + _Compagnie GĆ©nĆ©rale Transatlantique_, + + CompaƱia Transatlantica EspaƱola, La, + + Cromwell, code of, _see_ Maritime Charter of England, Great, + + Cunard, Samuel, + + Cunard Company, + + _CuraƧoa_, 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, + + ViallatĆ©s, 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 13718 *** diff --git a/13718-h/13718-h.htm b/13718-h/13718-h.htm new file mode 100644 index 0000000..d6b0815 --- /dev/null +++ b/13718-h/13718-h.htm @@ -0,0 +1,4076 @@ +<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN"> +<html> +<head> +<meta http-equiv="Content-Type" content="text/html; charset=UTF-8"> +<title>The Project Gutenberg eBook of Manual of Ship Subsidies, by Edwin M. Bacon</title> + <style type="text/css"> +/*<![CDATA[ XML blockout */ +<!-- + P { margin-top: .75em; + text-align: justify; + margin-bottom: .75em; + } + H1,H2,H3,H4,H5,H6 { + text-align: center; /* all headings centered */ + } + HR { width: 33%; + margin-top: 1em; + margin-bottom: 1em; + } + BODY{margin-left: 10%; + margin-right: 10%; + } + .linenum {position: absolute; top: auto; left: 4%;} /* poetry number */ + .note {margin-left: 2em; margin-right: 2em; margin-bottom: 1em;} /* footnote */ + .blkquot {margin-left: 4em; margin-right: 4em;} /* block indent */ + .pagenum {position: absolute; left: 92%; font-size: smaller; text-align: right;} /* page numbers */ + .sidenote {width: 20%; margin-bottom: 1em; margin-top: 1em; padding-left: 1em; font-size: smaller; float: right; clear: right;} + + .poem {margin-left:10%; margin-right:10%; text-align: left;} + .poem br {display: none;} + .poem .stanza {margin: 1em 0em 1em 0em;} + .poem span {display: block; margin: 0; padding-left: 3em; text-indent: -3em;} + .poem span.i2 {display: block; margin-left: 2em;} + .poem span.i4 {display: block; margin-left: 4em;} + hr.pg { width: 100%; + height: 5px; } + a:link {color:blue; + text-decoration:none} + link {color:blue; + text-decoration:none} + a:visited {color:blue; + text-decoration:none} + a:hover {color:red} + pre {font-size: 9pt;} + // --> + /* XML end ]]>*/ + </style> +</head> +<body> +<div>*** START OF THE PROJECT GUTENBERG EBOOK 13718 ***</div> +<h1>The Project Gutenberg eBook, Manual of Ship Subsidies, by Edwin M. Bacon</h1> +<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—"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." 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 "to awaken industry and increase the wealth of +the inhabitants and extend their influence,"<a name='FNanchor_D_4'></a><a href='#Footnote_D_4'><sup>[D]</sup></a> 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."<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 "Great Maritime <a name='Page_12'></a>Charter of England," 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 "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.<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 "all foreign vessels whatever from +lading with the plantations of America without having obtained a +license."<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 "sovereignty of the seas,"<a name='FNanchor_J_10'></a><a href='#Footnote_J_10'><sup>[J]</sup></a> 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.<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 "The Great Maritime +Charter of England."</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 "Maritime Charter" 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 "reciprocal liberty of commerce," between +the "territories of Great Britain in Europe and those of the United +States," 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>Curaçoa</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—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 "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 <i>Great Western</i> +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."<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 "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."<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 preëminent.<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—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 "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.<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 "beat off the American line."<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 "the cost of the North American service was not excessive," but +they advised that all contracts thereafter "be let at public +bidding."<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 "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.<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 "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."<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>—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—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 "International Mercantile Marine Company," in popular +parlance, the "Morgan Steamship Merger," a "combine" 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 +"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.<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, "History of Ship Subsidies."</p></div> + +<a name='Footnote_B_2'></a><a href='#FNanchor_B_2'>[B]</a><div class='note'><p> John E. Green, "Short History of the English People."</p></div> + +<a name='Footnote_C_3'></a><a href='#FNanchor_C_3'>[C]</a><div class='note'><p> W.H. Lindsay, "History of Merchant Shipping."</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, "Our Merchant Marine," p. 96.</p></div> + +<a name='Footnote_F_6'></a><a href='#FNanchor_F_6'>[F]</a><div class='note'><p> John Lewis Ricardo, "The Anatomy of the Navigation Laws," +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, "Our Navigation Laws"; 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, "American Marine," pp. 57-59.</p></div> + +<a name='Footnote_O_15'></a><a href='#FNanchor_O_15'>[O]</a><div class='note'><p> John Macgregor, "Commercial Tariffs."</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, "Chronological History of +Steam Navigation."</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, "The Story of the American Merchant +Marine," 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, "The American Merchant Marine," 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—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, "prosperity grew apace. At the end of +twelve years everything was flourishing."<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—- 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 <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 "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.<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 "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.<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 "strange phenomenon," as Professor +Viallatés puts it, "of a steady increase in the sailing-fleet, while the +number of steam-ships remained stationary."<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 "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.<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 "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).<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 +"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.<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 +"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.</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 "<i>cabotage international</i>."<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 Viallatés effectively states them in the fewest +words:</p> + +<div class='blkquot'><p>"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."! </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 Viallatés +explains,<a name='FNanchor_CC_81'></a><a href='#Footnote_CC_81'><sup>[CC]</sup></a> "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, <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 Viallatés 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 "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."<a name='FNanchor_CF_84'></a><a href='#Footnote_CF_84'><sup>[CF]</sup></a> Says Viallatés:</p> + +<div class='blkquot'><p>"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." </p></div> + +<p>Meeker:</p> + +<div class='blkquot'><p>"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."<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 Générale Transatlantique</i>, the +<i>Compagnie des Messagéries Maritimes</i>, the <i>Chargeurs Réunis</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, "The Influence of Sea Power +upon History," 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 Viallatés, "How France Protects Her Merchant +Marine," 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 Viallatés.</p></div> + +<a name='Footnote_BL_64'></a><a href='#FNanchor_BL_64'>[BL]</a><div class='note'><p> Viallatés.</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> Viallatés.</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> Viallatés.</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> Viallatés.</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—Meeker.</p></div> + +<a name='Footnote_CB_80'></a><a href='#FNanchor_CB_80'>[CB]</a><div class='note'><p> Meeker and Viallatés, 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: "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.<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—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.<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 "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."<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>"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."<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, "Modern Germany," 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—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—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 "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.<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, "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.<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 +"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."<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—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—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.<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—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 <a name='Page_48'></a>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."<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—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 reënactment 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, +"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.</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 "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."<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—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 Compañia Transatlantica Española</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 +"provided it appears that it was absolutely necessary that they be built +abroad."<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—NORWAY—SWEDEN</p> +<br /> + +<p>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.<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 "State contributions," 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 "trade" <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—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 "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.<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 "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 <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,—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: "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."<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—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—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—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 "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."<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 "with greater speed to the +distance than is performed by the Cunard Line between Boston and +Liverpool and back."<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: "for transportation by steam-ships +between New York and Bremen according to the contract with Edward Mills, +$258,609."<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 "to provide efficient mail services, to encourage navigation and +commerce, and to build up a powerful fleet in case of war."<a name='FNanchor_FY_181'></a><a href='#Footnote_FY_181'><sup>[FY]</sup></a> 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.</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,—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 "to +establish certain Post Routes and for other purposes," 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 "profitable to their owners as freight +vessels, and of essential service in promoting the interests of American +commerce."<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,—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 "Argonauts" 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—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—"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."<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 "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.</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 £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 "held the transatlantic record +with a passage of five days nineteen hours from Galway to St. +John's."<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,—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 "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.<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 "booming" 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> "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."<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)—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.<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, "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.</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 "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."<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, "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."<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 reëstablishment 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 "(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."<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—the highest class +of ocean liners,<a name='FNanchor_HM_221'></a><a href='#Footnote_HM_221'><sup>[HM]</sup></a>—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 +"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 <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 "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."<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—the <i>City of New York</i> and the <i>City of +Paris</i>—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,—the <i>St. Louis</i> and the <i>St. Paul</i>, launched November, +1894, and April, 1895, respectively,—each 11,600 tons, "larger, +swifter, safer, and more luxurious"<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 "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 <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, +"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."</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 "open door" rule, admitting for consideration any +"intelligent suggestion offered in good faith," that "alien agents" 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, "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."<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 "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 "subven<a name='Page_89'></a>tions" 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."<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: "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.</p> + +<p>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 +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 "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 "<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," +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."<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—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 "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.<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 +"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."<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 "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."<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, "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.<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, +"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.<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 "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 <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. "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.</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,—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.</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—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 +"citizens of the United States, or a corporation organized under the +laws of any of the States thereof."<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 "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.<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—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> +"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."<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> "Modern Germany," <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>, "American Marine," <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 Réunis</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 /> +"Clippers," 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 Messagéries Maritimes</i>, <a href='#Page_36'>36</a><br /> +<br /> +<i>Compagnie Fraissant</i>, <a href='#Page_36'>36</a><br /> +<br /> +<i>Compagnie Générale Transatlantique</i>, <a href='#Page_36'>36</a><br /> +<br /> +Compañia Transatlantica Española, 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>Curaçoa</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 "trade" 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 /> +"Dramatic line," <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 "shipping premiums" 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> "Short History of the English People," <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 /> +"Inman Line," <a href='#Page_20'>20</a>-<a href='#Page_23'>23</a>, <a href='#Page_85'>85</a><br /> +<br /> +"International Mercantile Marine Company," <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> "History of Merchant Shipping," <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>, "Our Navigation Laws," <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>, "Commercial Tariffs," <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> "American Merchant Marine," <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> "History of Ship Subsidies," <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 /> +"Morgan Steamship Merger," <i>see</i> "International Mercantile Marine Company"<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>, "Chronological History of Steam Navigation," <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>, "Anatomy of the Navigation Laws," <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> "Story of the American Merchant Marine," <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 "clippers" 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 /> +Viallatés, 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> "Our Merchant Marine," <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> +<div>*** END OF THE PROJECT GUTENBERG EBOOK 13718 ***</div> +</body> +</html> diff --git a/LICENSE.txt b/LICENSE.txt new file mode 100644 index 0000000..6312041 --- /dev/null +++ b/LICENSE.txt @@ -0,0 +1,11 @@ +This eBook, including all associated images, markup, improvements, +metadata, and any other content or labor, has been confirmed to be +in the PUBLIC DOMAIN IN THE UNITED STATES. + +Procedures for determining public domain status are described in +the "Copyright How-To" at https://www.gutenberg.org. + +No investigation has been made concerning possible copyrights in +jurisdictions other than the United States. Anyone seeking to utilize +this eBook outside of the United States should confirm copyright +status under the laws that apply to them. diff --git a/README.md b/README.md new file mode 100644 index 0000000..956d0a0 --- /dev/null +++ b/README.md @@ -0,0 +1,2 @@ +Project Gutenberg (https://www.gutenberg.org) public repository for +eBook #13718 (https://www.gutenberg.org/ebooks/13718) diff --git a/old/13718-8.txt b/old/13718-8.txt new file mode 100644 index 0000000..3f2e53b --- /dev/null +++ b/old/13718-8.txt @@ -0,0 +1,4402 @@ +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 _Curaēoa_, 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 preėminent.[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 reėnactment 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 Compańia Transatlantica Espańola_. + +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 reėstablishment 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_, + + Compańia Transatlantica Espańola, La, + + Cromwell, code of, _see_ Maritime Charter of England, Great, + + Cunard, Samuel, + + Cunard Company, + + _Curaēoa_, 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*** + + +******* This file should be named 13718-8.txt or 13718-8.zip ******* + + +This and all associated files of various formats will be found in: +https://www.gutenberg.org/dirs/1/3/7/1/13718 + + + +Updated editions will replace the previous one--the old editions +will be renamed. + +Creating the works from public domain print editions means that no +one owns a United States copyright in these works, so the Foundation +(and you!) can copy and distribute it in the United States without +permission and without paying copyright royalties. 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Bacon</title> + <style type="text/css"> +/*<![CDATA[ XML blockout */ +<!-- + P { margin-top: .75em; + text-align: justify; + margin-bottom: .75em; + } + H1,H2,H3,H4,H5,H6 { + text-align: center; /* all headings centered */ + } + HR { width: 33%; + margin-top: 1em; + margin-bottom: 1em; + } + BODY{margin-left: 10%; + margin-right: 10%; + } + .linenum {position: absolute; top: auto; left: 4%;} /* poetry number */ + .note {margin-left: 2em; margin-right: 2em; margin-bottom: 1em;} /* footnote */ + .blkquot {margin-left: 4em; margin-right: 4em;} /* block indent */ + .pagenum {position: absolute; left: 92%; font-size: smaller; text-align: right;} /* page numbers */ + .sidenote {width: 20%; margin-bottom: 1em; margin-top: 1em; padding-left: 1em; font-size: smaller; float: right; clear: right;} + + .poem {margin-left:10%; margin-right:10%; text-align: left;} + .poem br {display: none;} + .poem .stanza {margin: 1em 0em 1em 0em;} + .poem span {display: block; margin: 0; padding-left: 3em; text-indent: -3em;} + .poem span.i2 {display: block; margin-left: 2em;} + .poem span.i4 {display: block; margin-left: 4em;} + hr.pg { width: 100%; + height: 5px; } + a:link {color:blue; + text-decoration:none} + link {color:blue; + text-decoration:none} + a:visited {color:blue; + text-decoration:none} + a:hover {color:red} + pre {font-size: 9pt;} + // --> + /* XML end ]]>*/ + </style> +</head> +<body> +<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—"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." 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 "to awaken industry and increase the wealth of +the inhabitants and extend their influence,"<a name='FNanchor_D_4'></a><a href='#Footnote_D_4'><sup>[D]</sup></a> 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."<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 "Great Maritime <a name='Page_12'></a>Charter of England," 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 "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.<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 "all foreign vessels whatever from +lading with the plantations of America without having obtained a +license."<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 "sovereignty of the seas,"<a name='FNanchor_J_10'></a><a href='#Footnote_J_10'><sup>[J]</sup></a> 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.<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 "The Great Maritime +Charter of England."</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 "Maritime Charter" 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 "reciprocal liberty of commerce," between +the "territories of Great Britain in Europe and those of the United +States," 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>Curaçoa</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—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 "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 <i>Great Western</i> +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."<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 "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."<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 preëminent.<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—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 "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.<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 "beat off the American line."<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 "the cost of the North American service was not excessive," but +they advised that all contracts thereafter "be let at public +bidding."<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 "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.<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 "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."<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>—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—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 "International Mercantile Marine Company," in popular +parlance, the "Morgan Steamship Merger," a "combine" 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 +"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.<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, "History of Ship Subsidies."</p></div> + +<a name='Footnote_B_2'></a><a href='#FNanchor_B_2'>[B]</a><div class='note'><p> John E. Green, "Short History of the English People."</p></div> + +<a name='Footnote_C_3'></a><a href='#FNanchor_C_3'>[C]</a><div class='note'><p> W.H. Lindsay, "History of Merchant Shipping."</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, "Our Merchant Marine," p. 96.</p></div> + +<a name='Footnote_F_6'></a><a href='#FNanchor_F_6'>[F]</a><div class='note'><p> John Lewis Ricardo, "The Anatomy of the Navigation Laws," +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, "Our Navigation Laws"; 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, "American Marine," pp. 57-59.</p></div> + +<a name='Footnote_O_15'></a><a href='#FNanchor_O_15'>[O]</a><div class='note'><p> John Macgregor, "Commercial Tariffs."</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, "Chronological History of +Steam Navigation."</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, "The Story of the American Merchant +Marine," 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, "The American Merchant Marine," 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—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, "prosperity grew apace. At the end of +twelve years everything was flourishing."<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—- 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 <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 "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.<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 "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.<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 "strange phenomenon," as Professor +Viallatés puts it, "of a steady increase in the sailing-fleet, while the +number of steam-ships remained stationary."<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 "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.<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 "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).<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 +"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.<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 +"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.</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 "<i>cabotage international</i>."<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 Viallatés effectively states them in the fewest +words:</p> + +<div class='blkquot'><p>"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."! </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 Viallatés +explains,<a name='FNanchor_CC_81'></a><a href='#Footnote_CC_81'><sup>[CC]</sup></a> "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, <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 Viallatés 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 "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."<a name='FNanchor_CF_84'></a><a href='#Footnote_CF_84'><sup>[CF]</sup></a> Says Viallatés:</p> + +<div class='blkquot'><p>"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." </p></div> + +<p>Meeker:</p> + +<div class='blkquot'><p>"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."<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 Générale Transatlantique</i>, the +<i>Compagnie des Messagéries Maritimes</i>, the <i>Chargeurs Réunis</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, "The Influence of Sea Power +upon History," 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 Viallatés, "How France Protects Her Merchant +Marine," 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 Viallatés.</p></div> + +<a name='Footnote_BL_64'></a><a href='#FNanchor_BL_64'>[BL]</a><div class='note'><p> Viallatés.</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> Viallatés.</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> Viallatés.</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> Viallatés.</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—Meeker.</p></div> + +<a name='Footnote_CB_80'></a><a href='#FNanchor_CB_80'>[CB]</a><div class='note'><p> Meeker and Viallatés, 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: "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.<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—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.<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 "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."<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>"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."<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, "Modern Germany," 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—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—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 "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.<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, "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.<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 +"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."<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—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—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.<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—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 <a name='Page_48'></a>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."<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—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 reënactment 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, +"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.</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 "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."<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—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 Compañia Transatlantica Española</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 +"provided it appears that it was absolutely necessary that they be built +abroad."<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—NORWAY—SWEDEN</p> +<br /> + +<p>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.<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 "State contributions," 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 "trade" <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—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 "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.<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 "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 <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,—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: "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."<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—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—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—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 "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."<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 "with greater speed to the +distance than is performed by the Cunard Line between Boston and +Liverpool and back."<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: "for transportation by steam-ships +between New York and Bremen according to the contract with Edward Mills, +$258,609."<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 "to provide efficient mail services, to encourage navigation and +commerce, and to build up a powerful fleet in case of war."<a name='FNanchor_FY_181'></a><a href='#Footnote_FY_181'><sup>[FY]</sup></a> 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.</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,—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 "to +establish certain Post Routes and for other purposes," 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 "profitable to their owners as freight +vessels, and of essential service in promoting the interests of American +commerce."<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,—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 "Argonauts" 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—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—"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."<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 "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.</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 £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 "held the transatlantic record +with a passage of five days nineteen hours from Galway to St. +John's."<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,—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 "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.<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 "booming" 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> "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."<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)—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.<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, "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.</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 "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."<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, "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."<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 reëstablishment 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 "(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."<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—the highest class +of ocean liners,<a name='FNanchor_HM_221'></a><a href='#Footnote_HM_221'><sup>[HM]</sup></a>—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 +"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 <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 "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."<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—the <i>City of New York</i> and the <i>City of +Paris</i>—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,—the <i>St. Louis</i> and the <i>St. Paul</i>, launched November, +1894, and April, 1895, respectively,—each 11,600 tons, "larger, +swifter, safer, and more luxurious"<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 "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 <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, +"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."</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 "open door" rule, admitting for consideration any +"intelligent suggestion offered in good faith," that "alien agents" 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, "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."<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 "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 "subven<a name='Page_89'></a>tions" 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."<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: "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.</p> + +<p>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 +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 "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 "<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," +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."<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—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 "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.<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 +"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."<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 "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."<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, "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.<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, +"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.<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 "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 <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. "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.</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,—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.</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—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 +"citizens of the United States, or a corporation organized under the +laws of any of the States thereof."<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 "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.<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—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> +"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."<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> "Modern Germany," <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>, "American Marine," <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 Réunis</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 /> +"Clippers," 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 Messagéries Maritimes</i>, <a href='#Page_36'>36</a><br /> +<br /> +<i>Compagnie Fraissant</i>, <a href='#Page_36'>36</a><br /> +<br /> +<i>Compagnie Générale Transatlantique</i>, <a href='#Page_36'>36</a><br /> +<br /> +Compañia Transatlantica Española, 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>Curaçoa</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 "trade" 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 /> +"Dramatic line," <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 "shipping premiums" 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> "Short History of the English People," <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 /> +"Inman Line," <a href='#Page_20'>20</a>-<a href='#Page_23'>23</a>, <a href='#Page_85'>85</a><br /> +<br /> +"International Mercantile Marine Company," <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> "History of Merchant Shipping," <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>, "Our Navigation Laws," <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>, "Commercial Tariffs," <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> "American Merchant Marine," <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> "History of Ship Subsidies," <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 /> +"Morgan Steamship Merger," <i>see</i> "International Mercantile Marine Company"<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>, "Chronological History of Steam Navigation," <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>, "Anatomy of the Navigation Laws," <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> "Story of the American Merchant Marine," <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 "clippers" 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 /> +Viallatés, 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> "Our Merchant Marine," <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> +<p>This and all associated files of various formats will be found in:<br /> +<a href="https://www.gutenberg.org/dirs/1/3/7/1/13718">https://www.gutenberg.org/1/3/7/1/13718</a></p> +<p>Updated editions will replace the previous one--the old editions +will be renamed.</p> + +<p>Creating the works from public domain print editions means that no +one owns a United States copyright in these works, so the Foundation +(and you!) can copy and distribute it in the United States without +permission and without paying copyright royalties. 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For +example an eBook of filename 10234 would be found at: + +https://www.gutenberg.org/dirs/1/0/2/3/10234 + +or filename 24689 would be found at: +https://www.gutenberg.org/dirs/2/4/6/8/24689 + +An alternative method of locating eBooks: +<a href="https://www.gutenberg.org/dirs/GUTINDEX.ALL">https://www.gutenberg.org/dirs/GUTINDEX.ALL</a> + +*** END: FULL LICENSE *** +</pre> +</body> +</html> diff --git a/old/13718.txt b/old/13718.txt new file mode 100644 index 0000000..9177064 --- /dev/null +++ b/old/13718.txt @@ -0,0 +1,4402 @@ +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_, + + + +***END OF THE PROJECT GUTENBERG EBOOK MANUAL OF SHIP SUBSIDIES*** + + +******* This file should be named 13718.txt or 13718.zip ******* + + +This and all associated files of various formats will be found in: +https://www.gutenberg.org/dirs/1/3/7/1/13718 + + + +Updated editions will replace the previous one--the old editions +will be renamed. + +Creating the works from public domain print editions means that no +one owns a United States copyright in these works, so the Foundation +(and you!) can copy and distribute it in the United States without +permission and without paying copyright royalties. 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