HE
740
Ub
EPARTMENT OF COMMERCE
BUREAU OF FOREIGN AND DOMESTIC COMMERCE
E. E. PRATT, Chief
SPECIAL AGENTS SERIES-No. 119
GOVERNMENT AID TO
MERCHANT SHIPPING
STUDY OF SUBSIDIES, SUBVENTIONS,
AND OTHER FORMS OF STATE AID IN
PRINCIPAL COUNTRIES OF THE WORLD
By
GROSVENOR M. JONES
Commercial Agent.
DEPARTMENT
UNITED
OF
COMMERCE
STATES
OF
AMERICA
WASHINGTON
GOVERNMENT PRINTING OFFICE
1916
DEPARTMENT OF COMMERCE
U.S.
BUREAU OF FOREIGN AND DOMESTIC COMMERCE
E. E. PRATT, Chief
SPECIAL AGENTS SERIES-No. 119
GOVERNMENT AID TO
MERCHANT SHIPPING
STUDY OF SUBSIDIES, SUBVENTIONS,
AND OTHER FORMS OF STATE AID IN
PRINCIPAL COUNTRIES OF THE WORLD
By
GROSVENOR M. JONES
Commercial Agent
DEPARTMENT
✩
UNITED
STATES
OF
COMMERCE
OF
AMERICA
WASHINGTON
GOVERNMENT PRINTING OFFICE
1916
HE
740
U6
A5
1916
ADDITIONAL COPIES
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Refer.
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Referi
Supt. Doci
8-12-26
13615
Letter of submittal.......
Introduction and summary.
Sources of the data..
Definition of terms..
Forms of Government aid.
CONTENTS.
Page.
5
7
8
8
Reservation of coasting trade.
Exemption from import duties on shipbuilding materials.
Admission of foreign-built vessels to national registry.
Preferential railway rates...
Loans to shipowners..
Reimbursement of port dues, etc.
Reimbursement of canal dues..
Exemption from taxation...
Postal subventions.
Bounties or subsidies..
Subventions to foreign steamship lines..
Policy of Government aid:
Great Britain.
United States.
Germany.
France.
Italy..
Austria-Hungary..
Japan...
Scandinavian countries.
Netherlands...
Belgium...
Spain and Portugal..
Latin-American countries.
State-owned steamship lines......
State control of privately owned steamship lines...
State participation in profits of steamship companies.
Chapter I.--United States..
Chapter II.--Great Britain and the British possessions..
Great Britain.
Canada..
Australia.
New Zealand..
South Africa…….
Jamaica...
Other British possessions...
Chapter III.--Germany and Austria-Hungary.
Germany...
Austria-Hungary..
9
=23;
9
10
11
12
13
14
14
15
19
21
21
23
23
24
24
24
25
25
25
26
26
26
26
28
28
30
45
45
62
70
74
74
75
75
76
76
86
3
4
CONTENTS.
Page.
Chapter IV.-Scandinavian countries..
Denmark...
Norway.
Sweden..
Chapter V.-Belgium and the Netherlands.
Belgium.....
Netherlands...
Chapter VI.-France, Italy, Spain, and Portugal.
France.
106
103
110
117
122
122
126
135
135
Italy.
Spain...
Portugal....
Russia..
Roumania.
Bulgaria....
Greece..
Chapter VIII.-Japan.
Chapter IX.-Latin-American countries..
Argentina.
Brazil...
Chile..
Guatemala.
Mexico...
Peru....
Appendixes:
165
185
194
Chapter VII.-Russia, Roumania, Bulgaria, and Greece..
196
196
207
208
209
211
223
228
228
230
231
231
232
A. Contract between the department of public works (Norway) and G. M.
Bryde for the establishment of a steamship line between Norway
and Mexico...
233
B. French subsidy law of April 19, 1906..
234
C. Decree prescribing administrative regulations for the application of the
French subsidy law of April 19, 1906...
238
D. Contract of the Compagnie des Messageries Maritimes of December 30,
1911...
242
E. Charter and by-laws of the Russian Volunteer Fleet.
INDEX...
249
257
LETTER OF SUBMITTAL.
DEPARTMENT OF COMMERCE,
BUREAU OF FOREIGN AND DOMESTIC COMMERCE,
Washington, May 1, 1916.
SIR: I beg to submit herewith a report on Government aid to mer-
chant shipping, which has been prepared by Commercial Agent
Grosvenor M. Jones.
Much of the data presented in this report was compiled by Mr.
Jones in the preparation of his report on the navigation laws of
the leading maritime countries, it being the original intention to
include in a comprehensive report the subjects of shipping laws and
Government aid to shipping. However, as the work developed,
it became apparent that a more effective presentation of both sub-
jects could be made if they were considered in separate reports.
The original scope of the study of Government aid to shipping
has, therefore, been greatly extended, with the result that the data
now cover practically every Government that grants direct or indi-
rect aid to its own or to foreign shipping. The report also contains
statistics showing the development of the merchant navies of the
more important countries and in a number of cases data as to the
earnings of subsidized and nonsubsidized lines.
The subject of Government aid to shipping has generally been
treated as merely a question of direct financial aid in the form of
subsidies, bounties, or subventions, and little or no account has been
taken of the indirect, but often more substantial, aid derived from
the reservation of the coasting trade to national ships, the free im-
portation of ships and shipbuilding materials, the privilege of using
foreign-built ships, preferential railway rates, loans at low rates of
interest to shipowners, and similar privileges.
The importance of indirect State aid is strikingly illustrated in
the case of the merchant marine of the United States, which has long
derived substantial benefits from its monopoly of the extensive coast-
ing trade of the country and has recently been greatly benefited by
the grant of the privilege of using foreign-built ships in the over-
seas trade. Incidentally, it should be noted that natural economic
conditions now favor the development of a strong over-seas merchant
marine in the United States in perhaps a greater degree than they
formerly impeded that development.
5
6
LETTER OF SUBMITTAL.
By analyzing the causes for the growth or decline of the merchant
navies of a large number of countries and by giving detailed infor-
mation as to all the forms of Government aid that have been ex-
tended to shipping in these countries since the advent of the steam-
ship, this report, it is hoped, will meet the need for full and up-to-
date information on the subjects covered.
Respectfully,
To Hon. WILLIAM C. REDFIELD,
E. E. PRATT,
Chief of Bureau.
Secretary of Commerce.
GOVERNMENT AID TO MERCHANT SHIPPING.
1
INTRODUCTION AND SUMMARY.
The purpose of the present report is to describe the different
methods by which Government aid is given to merchant shipping in
various countries. This report, therefore, gives a detailed account
of subsidy legislation in the countries that have made extensive use
of subsidies and also presents details regarding the system or policy
in operation in every country for which data are available.
A comprehensive presentation of the facts relating to Government
aid to shipping, and not of arguments for or against any or all
forms of State assistance, has been the main object in the prepara-
tion of this report. No comprehensive report on this subject has
been published in English since the issuance of Dr. Meeker's History
of Shipping Subsidies, which came out in 1905. Various sections in
the annual reports of the United States Bureau of Navigation
since 1885 discuss Government aid to shipping, but the last reference
to this subject is to be found in the report of 1909.
Many important changes have occurred since 1909, and this report
brings the information more nearly down to date and presents in one
volume a survey that covers the entire range of subsidy legislation in
the more important countries.
The information presented in this report covers all forms of State
aid to shipping, and attention has been called not only to subsidies
and subventions but also to the various forms of indirect Government
assistance, such as the reservation of the coasting trade to national
ships, exemptions from import duties, port dues, and taxation, the
privilege of using foreign-built ships, preferential railroad rates,
and loans to shipowners.
SOURCES OF THE DATA.
The data presented herewith have been secured largely from pri-
mary official sources. Recourse has been had to the reports of ad-
ministrative bureaus charged with the control of mercantile affairs in
the several countries and to special reports of commissions appointed
to investigate forms of State aid. Much information has been
derived from the special reports of the British Foreign Office on
the subject of "Shipping Subsidies" and of the British Board
of Trade Select Committee on Steamship Subsidies (1901–2);
from the reports of French parliamentary commissions that have
made special studies of this subject; and from the annual reports of
the United States Bureau of Navigation, particularly those for 1885,
1894, 1898, 1899, 1901, and 1909.
7
8
'GOVERNMENT AID TO MERCHANT SHIPPING.
66
DEFINITION OF TERMS.
In this report "subsidy" and "bounty" are treated as synony-
mous terms and are used to describe grants that are made without
any requirement of special service to the Government. The term
subvention," on the other hand, is used to describe grants that are
conditioned upon the performance by the grantee of certain pre-
scribed services for the State, such as the rapid transportation of
mails on regular schedules and the construction of merchant ships
according to plans of the naval authorities and for use as auxiliary
cruisers and transports in time of war.
This distinction in the use of the terms supplies a terminology
that plainly and adequately describes the true nature of the two
principal classes of grants in aid of shipping. In recent years a
great deal of confusion in terms has developed because of the effort
to avoid the use of the word "subsidy," which has fallen into
disrepute. Accordingly, terms such as "compensation," " premium,"
"subvention," and "aid" have frequently been used to designate
grants that formerly were known as "subsidies." The substitute
terms, however, obscure the true purpose of the aid.
In this connection it will be of interest to refer to the report of
the British Board of Trade Select Committee on Steamship Subsi-
dies¹ which states that "bounty, subsidy, and subvention are all
words denoting pecuniary aid and are substantially interchange-
able," but that "bounty is looked upon by many with greater suspi-
cion because the word also bears a meaning of generosity and liber-
ality," while "subvention has really the same meaning as subsidy,
but is thought to be more euphemistic and to create less prejudice.
The select committee, however, declined to make a distinction in the
use of these terms, saying that "it sometimes occurs that where a
given sum is granted as a subsidy it is very difficult indeed to analyze
it into its component parts and lay down that so much of it is paid
as a postal subsidy, so much for admiralty purposes, or so much for
the encouragement of trade."
FORMS OF GOVERNMENT AID.
State aid to merchant shipping may take a number of forms. In
the commonly accepted version of the term Government aid means
the payment of bounties, subsidies, or subventions, but its scope is,
in fact, much broader, since substantial assistance is often rendered
by the grant of privileges whose benefits can not be computed in
terms of money.
In this report Government aid has been treated under two broad
classes, namely, direct and indirect aid. Under the head of indirect
aid are considered (a) reservation of coasting trade; (b) exemption
from import duties on shipbuilding materials; (c) preferential rail-
way rates; (d) loans to shipowners; (e) reimbursement of canal
dues; and (f) other indirect aid, such as exemption from port dues,
taxation, etc. Under the head of direct aid are shown (a) bounties
or subsidies, divided, as a rule, into three principal classes, namely,
construction, general navigation, and special navigation bounties;
1 Report of Dec. 3, 1902, p. xxii.
INTRODUCTION AND SUMMARY.
9
and (b) subventions, divided into two classes, naniely, postal and
admiralty.
RESERVATION OF COASTING TRADE.
In the case of many of the selected countries the extent of the
coasting trade is so limited that its monopolization by ships flying
the national flag is of comparatively little advantage to such ship-
ping. Of the leading maritime countries Great Britain is dis-
tinguished by the fact that the extensive coasting trade of the British
Isles and the so-called imperial coasting trade (the trade between the
mother country and the colonies and between the colonies themselves)
have been open to the ships of all nations since about 1850, when
the navigation acts were repealed. In recent years, however, con-
sideration has been given to a proposal that the British and imperial
coasting trade be closed to ships of nations denying British ships
reciprocal privileges and to subsidized foreign ships, except upon
payment of an indemnity.¹
The coasting trades of Norway and Sweden are open to the ships
of all other nations except Sweden and Norway, respectively. The
coasting trade of Denmark is open without qualification. The con-
figuration of the coasts of these countries and their sparse population
make their coasting trades of little value in the development of a
merchant marine. In fact, both Norway and Sweden find it neces-
sary to subsidize a number of coastwise lines to insure regular trade
and mail communications.
The coasting trade of Germany, while not important, is largely
held by German ships, but this is not a result of legislation, since,
nominally, the coasting trade of Germany is open to the ships of
other nations that grant reciprocal privileges to German ships.
Both the meager coasting trade of the Netherlands proper and the
extensive trade between the Netherlands and the Dutch East Indies
are open to the ships of nations that grant reciprocal privileges to
Dutch ships.
The United States, France, Italy, Austria-Hungary, Spain, and
Belgium, among the more important maritime countries, have long
reserved their coasting trade to national ships, while Japan has re-
served all of its coasting trade to its own ships only since 1910.
Russia has long reserved the trade between Russian ports on the
same sea for Russian ships, but it was not until the issuance of the
royal decree of May 29, 1897, that the trade between all Russian ports
was restricted to Russian ships.
The coasting trade of Portugal proper and the trade between Por-
tugal and the adjacent islands and Portuguese West Africa are
reserved for Portuguese vessels, but the trade between Portugal and
the other Portugese possessions is open to foreign vessels.
EXEMPTION FROM IMPORT DUTIES ON SHIPBUILDING MATERIALS.
All shipbuilding materials have been exempt from customs duties
in England since the adoption of the free-trade policy. Such mate-
rials have been exempt for many years also in Germany and the
1 Report of British Board of Trade Select Committee on Steamship Subsidies, Dec. 3,
1902, p. xxii.
::
10
GOVERNMENT AID TO MERCHANT SHIPPING.
Netherlands. Belgium has granted free admission to shipbuilding
materials since April 12, 1864. All shipbuilding materials have been
on the free list in the United States since the tariff act of 1909,
although many such materials had been exempt from duties since the
tariff act of 1894.
France, Italy, and Spain levy duties on materials used in the con-
struction, repair, and equipment of ships, despite the fact that their
iron and steel industries can not under present conditions compete
with those of Great Britain and Germany, and many products of these
industries must be imported. These countries wish, however, to pro-
tect domestic industries, even though bounties must be paid to ship-
builders to offset the duties. The fact that these countries levy import
duties on shipbuilding materials must be borne in mind when refer-
ence is made to the fact they pay bounties on ship construction.
The Scandinavian countries impose import duties on shipbuild-
ing materials but allow drawbacks. Sweden allows a drawback of
duties actually paid on materials used in the construction in Swedish
yards of any ship of 40 tons and over. Denmark allows a draw-
back equal to not more than 2 per cent of the selling price of all
ships built in Danish yards. And Norway makes in lieu of a draw-
back a grant amounting to 2 per cent of the selling price of new
steamers of more than 300 gross tons and to 1 per cent on new
steamers of 50 to 300 tons and sailing vessels of 50 tons and over,
as well as a grant equal to 1.5 per cent of the cost of repairs on
vessels of 300 tons and over, if the cost is at least 1,000 kroner ($268).
Prior to 1898 Russia levied a duty on shipbuilding materials as
well as ships. In 1898 specified shipbuilding materials and iron
or steel steamships for over-seas trade were put on the free list
for a period of 10 years. This policy has been continued from time
to time by subsequent decrees.
ADMISSION OF FOREIGN-BUILT VESSELS TO NATIONAL REGISTRY.
For many years no country of importance with the exception of
the United States has required that ships flying the national flag
shall be of domestic construction, although practically every country
has made this requirement in the case of steamships receiving postal
subventions.
England has granted registers to foreign-built ships, in other
words has pursued the "free-ship" policy, since about 1850. At
that time wooden sailing vessels were predominant and these could
be secured more cheaply in the United States, which had larger
supplies of timber and naval stores and a more efficient ship-building
industry. As a result of this free-ship policy the merchant marine
of Great Britain received large accessions during the Civil War,
when more than 750,000 tons of American shipping secured foreign
registers to avoid capture or destruction.
Germany has also pursued the free-ship policy but at the same
time has given much encouragement to the domestic production of
ships by making low railroad rates on materials transported from
the iron and steel manufacturing centers in the interior to the ship-
yards along the coast and by requiring that subventioned steamers
should be of domestic construction.
INTRODUCTION AND SUMMARY.
11
France has at times gone so far in its free-ship policy as to pay
bounties on foreign-built ships but has paid mail subventions only
to domestic-built vessels, although the recent contract of the Com-
pagnie Générale Transatlantique provides that in the case of diffi-
culties arising from "force majeure" the company may be author-
ized to use foreign-built vessels.
The free-ship policy has long been pursued also by the Scandi-
navian countries, the Netherlands, Belgium, Spain, Portugal, Greece,
Japan, and practically every other country except the United States.
The pursuance of this policy has been due chiefly to the advantage to
be gained in purchasing steamships in the cheapest market. These
countries have not, however, consistently pursued the free-ship
policy, since most of them have stipulated in mail contracts or in
subsidy legislation either that the ships receiving subventions or
subsidies should be of domestic construction or that larger grants
should be paid to domestic-built ships.
The United States has adopted the free-ship policy in full only
since the outbreak of the present war in Europe and only in respect
to ships engaged in the over-seas trade, but a step in this direction
was taken in the Panama Canal act of August 24, 1912, which ad-
mitted to American registry seaworthy foreign-built ships not more
than 5 years old. Foreign-built ships are not yet permitted to engage
in the extensive coasting trade of this country, while domestic-built
ships constructed of foreign materials have been permitted to engage
in the entire coasting trade during the whole year only since the
passage of the Panama Canal act of August 24, 1912.
The policy pursued in the United States from 1792 down to 1914
of granting registers only to American-built ships was dictated orig-
inally by purely mercantilistic considerations, but in more recent
years it has probably resulted from a desire to foster the domestic
shipbuilding industry. There is no question but that this policy has
been of some assistance in maintaining the industry, for there has
been a large and growing demand for ships for the coastwise trade,
which is restricted to American-built ships and has developed
rapidly. The building program of the American Navy has also been
of considerable assistance. If, however, the shipbuilding industry
of the United States had been obliged to depend upon orders for
ships in the over-seas trade, it would have declined long since be-
cause of the higher costs of American ship construction.
One of the strongest arguments against various subsidy bills that
have been proposed in the past 20 years has been the fact that the
bills provided for navigation bounties that would have been to a large
degree bounties on construction, since they were intended to offset
the higher depreciation and interest charges of the higher-priced
American-built ships, as well as the higher operating costs. Such
legislation appeared, therefore, to grant an artificial and unwar-
ranted stimulus to the construction of over-seas ships and to have
been prepared in the interest of the shipbuilder rather than in the
interest of the shipowner or of the exporter.
PREFERENTIAL RAILWAY RATES.
Assistance in the form of lower rail rates on goods shipped over
specified steamship lines is a practice that has been followed in Ger-
12
GOVERNMENT AID TO MERCHANT SHIPPING.
many with respect to the German Levant and the German East
Africa Lines since the years 1890 and 1895, respectively. These,
differentials have a double purpose, since by enabling German manu-
facturers to sell their products at lower prices in the countries
reached by these lines they develop German trade and at the same
time increase the traffic on the preferred steamship lines.
France, like Germany, has made use of differential export railroad
rates to assist in the development of traffic on certain French steam-
ship lines, as well as to promote the foreign trade of France. The
United States vice consul at Havre reported in 1913 that the Orleans
Railway gives reduced rates on goods shipped to French West Africa
and to South America and a special reduction of 20 per cent on goods
shipped to Newhaven, England, from St. Nazaire by vessels of the
Compagnie Générale Transatlantique; that the Western Railway
makes a special rate on shipments to New York on the freight vessels
of the Compagnie Générale Transatlantique; and that the Paris-
Lyon-Mediterranean Railway makes special rates for goods shipped
to the Levant and the Far East by specified French lines.
Preferential railway rates of this character were at one time
granted in Russia with respect to shipments of tea carried to Odessa
in ships of the Russian Volunteer Fleet.
Preferential railroad rates of the character just described should
be clearly distinguished from the system of general preferential rail
rates on export commodities. The latter rates are applicable to all
export commodities without regard to the nationality of the ships
in which they are carried, and are given solely to promote foreign
trade, while the former apply only to national ships and are in-
tended as an aid toward the development of those lines, as well as
the extension of the trade of the country.
Both Germany and France have a general system of export rail
rates, as well as a special system of rates for goods carried by speci-
fied steamship lines. The general system is to be found also in the
United States, Norway, Sweden, Denmark, Belgium, the Nether-
lands, and Spain.
LOANS TO SHIPOWNERS.
The policy of granting loans to shipowners at low rates of in-
terest or without interest was begun, it is believed, by Austria. A
contract made on July 25, 1891, between the Austrian Government
and the Austrian Lloyd Steamship Co. provided that the latter
should receive a Government loan of 1,500,000 florins ($609.000)
for the construction of new steamers, the same to be available in
three equal amounts and to be repaid without interest in five yearly
installments, beginning January 2, 1902. The Austrian Govern-
ment, in a contract made July 4, 1892, with the Danube Steamship
Co., which operates steamers on the Danube River, granted this
company an advance or loan amounting to 250,000 florins ($101,500)
per year from 1891 to 1902; 300,000 crowns ($60,900) per annum
for the years 1903 to 1905; and 600,000 crowns ($121,800) in 1906.
These loans were to be repaid without interest.
The only instance of a loan to a steamship company by the British
Government was the loan made to the Cunard Steamship Co. under
the mail and admiralty subvention contract of 1903. Under this
INTRODUCTION AND SUMMARY.
13
contract the British Government loaned the steamship company
£2,600,000 ($12,652,900) for the building of two steamers (the Lusi-
tania and the Mauretania) that should be faster than any afloat and
suitable for the use of the Admiralty. The loan was made at the
rate of 23 per cent, which is about 2 per cent lower than the rate at
which the company could have borrowed a similar amount in the
open market.
The policy of granting loans at low rates of interest was instituted
in Sweden under the law of 1903, which established what is known
as the shipowners' fund (Rederilane-fonden). The object of this
fund is to provide loans at low rates of interest and on favorable
terms to Swedish steamship companies.
Russia instituted the policy of making loans to shipowners in 1904.
A law of that year provides for loans at the rate of 3.8 per cent
interest to persons constructing ships in Russian yards. The loans
may not exceed two-thirds of the value of the Russian materials
used in the construction of the ship, and are payable in 20 years.
Comparatively few loans have been made under this law. Under
an agreement made in 1911 between the Russian Government and
the Russian Volunteer Fleet for the subsidizing of certain steamship
services in the Far East it was stipulated that the Volunteer Fleet
should build six new steamships, and that the Russian Government
should assist the company by a loan of 3,000,000 rubles ($1,545,000)
without interest, the same to be repaid in 20 annual installments,
beginning with 1914. A law passed in January, 1911, authorized the
granting of loans on very favorable terms for the acquisition of
seagoing wooden sailing vessels, newly built or in process of con-
struction either in Russia or in foreign yards, for coastwise naviga-
tion in the Russian Far East.
The policy of granting loans to shipping companies operating
under the Belgian flag was instituted by the law of August 18, 1907,
which gave the Government authority to subscribe, under certain
conditions, a sum not exceeding 5,000,000 francs ($965,000) toward
the capital stock of three Belgian shipping companies, the sums ad-
vanced in this manner to be secured by the issuance of 3 per cent
bonds redeemable at par after 20 years.
Since the beginning of the present year the French Government has
considered a plan to increase the French merchant marine by pro-
viding for Government loans to shipbuilding enterprises. A bill pre-
sented to Parliament on January 14 authorized an appropriation of
100,000,000 francs ($19,300,000) to be used in making loans during
the war and for a period of 12 months thereafter. The bill pro-
vides that the interest on these loans should be calculated at the rates
charged by the Bank of France for loans on securities, and that the
loan should not exceed 70 per cent of the purchase price of vessels
bought by steamship companies having a fleet of 20,000 tons or over
and 80 per cent in the case of companies having smaller fleets.
REIMBURSEMENT OF PORT DUES, ETC.
Denmark and Belgium are the only important countries that have
extended aid to shipping by granting exemptions from, or making
reimbursement of, port dues. For many years the Danish Govern-
14
GOVERNMENT AID TO MERCHANT SHIPPING.
ment made a reimbursement of all wharfage charges paid at the
Government wharves at Esbjerg by vessels operated on the sub-
sidized lines between Denmark and England. This privilege was
withdrawn in 1910 when the subsidy was suspended.
For many years prior to the war in Europe, Belgium reimbursed
the North German Lloyd, the Kosmos Line, and the United Steam-
ship Co. of Copenhagen for all pilotage fees, port dues, etc., paid to
Belgian and Dutch officials.
The Spanish subsidy law of June 14, 1909, recommended that
Spanish ships be favored in the matter of port charges, but just
what form of preferential treatment is accorded is not definitely
known.
Chile grants the Pacific Steam Navigation Co., a British line, valu-
able privileges at the Government wharf at Valparaiso in lieu of a
subvention for postal services, while Mexico for a number of years
made a substantial reduction in port charges to foreign lines of
steamships that called regularly at Mexican ports.
REIMBURSEMENT OF CANAL DUES.
The policy of granting indirect aid to shipping by reimburse-
ment of canal dues was instituted by Russia in 1879. This practice
has been extended from time to time and now provides for the reim-
bursement of the full amount of the canal dues paid by Russian
steamers bound for or sailing from any Russian port in the Far
East and for a reimbursement of two-thirds of the full dues paid by
Russian steamers bound for or sailing from ports on the Indian
Ocean and non-Russian ports on the Pacific Ocean. In the period
from 1879 to 1906 the Russian Government expended approximately
$4,400,000 in reimbursement of Suez Canal dues.
The Austrian Government makes a reimbursement of Suez Canal
dues paid by the steamers of the Austrian Lloyd. This policy is
believed to have been instituted under the mail subvention contract
of July 25, 1891. The benefits conferred by this form of indirect
aid may be seen from the fact that in the period from 1901 to 1910 the
amounts paid annually to the Austrian Lloyd Steamship Co. in
reimbursement of canal dues ranged from $395,585. to $492,500.
Sweden instituted this policy in 1911 under contract made in that
year with the Swedish East Asiatic Co., the Government agreeing to
reimburse 60 per cent of the Suez Canal dues paid in 1915, 55 per
cent of those paid in 1916, and 50 per cent of those paid in 1917.
Italy refunds all Corinth Canal dues paid by the ships of the
Societa Nazionale di Servizi Marittimi. The amount of the reim-
bursement in the fiscal year 1912-13 was $36,746. It might be noted
that the reimbursement is made in return for reduced rates on wine,
olive oil, cheese, and cattle exported from Sardinia.
The policy of making reimbursement of Suez Canal dues paid by
French steamships was instituted in the contract made on December
30, 1911, with the Compagnie des Messageries Maritimes.
EXEMPTION FROM TAXATION.
This form of indirect aid has, so far as can be ascertained, been
granted only in the Kingdoms of Austria and Hungary. The prac
INTRODUCTION AND SUMMARY.
15.
tice was first introduced in Austria in the law of June 18, 1890, which
granted an exemption from income and trade taxes on all iron or
steel vessels engaged in ocean voyages.
The Hungarian subsidy law of June 30, 1893, granted an exemp-
tion from the trade tax on all sailing vessels and steamships en-
titled to bounties under that law and not owned by a company
operating mail contract lines.
The laws of the State of New York exempt from all taxation for
State and local purposes all American-owned ships registered at any
port in the State if engaged in the foreign trade of the United States.
Corporations owning such ships are exempt until December 31, 1922,
from all taxation upon their capital stock, franchises, and earnings.i
Alabama exempts ships engaged in foreign commerce from taxa-
tion, while the State of Washington exempts all ships, built or in
process of construction, in the coastwise as well as in the foreign trade
of the United States. 8
2
POSTAL SUBVENTIONS.
The granting of postal subventions to steamship lines antedates
the bounty or subsidy system and is in more general use throughout
the world. The leading maritime nation of the world, Great Britain,
was probably the first to adopt the policy of paying subventions for
the transportation of mail, the first contract of this character being
the contract made in 1838 with the Peninsular Co. for the transporta-
tion of mails between England, Spain, and Portugal. About this
period also the first contracts with the Cunard Line, the Royal
Mail Steam Packet Co., and the Pacific Steam Navigation Co. were
entered into.
The United States and France soon followed the example of Great
Britain. The first United States contracts were made in 1847, and
were with the Ocean Steam Navigation Co. for service between New
York and Bremen and New York and Havre, and with E. K. Collins
for a service between New York and Liverpool. The first formal
mail contract made by the French Government was in 1851, and was
with the Compagnie Générale Transatlantique.
Germany did not adopt the policy of paying postal subventions
until 1886, when a contract with the North German Lloyd was con-
cluded. A number of other countries, for example, Norway, Swe-
den, Italy, the Netherlands, and Brazil, adopted the policy of
mail subventions before Germany took it up. At the present time
the payment of postal subventions is the only form of direct financial
assistance that has been extended by the German Government.
The purpose of mail subvention contracts is primarily to encourage
the maintenance of fast mail services on regular routes and schedules.
In many instances a motive of almost equal weight is that of main-
taining the fastest possible communication between the mother coun-
try and her colonies. Incidentally a third object is commonly
achieved, namely, that of providing vessels suitable for auxiliary
cruisers and transports in time of war, and, in many cases, a fourth
1 Consolidated Laws of the State of New York, 1909. tax law.
Revenue Code of Alabama, 1911. Art. III. sec. 2082, par. 3.
• Remington and Ballinger's Annotated Codes and Statutes, 1910, sec. 9093.
16
GOVERNMENT AID TO MERCHANT SHIPPING.
object, namely, that of fostering the domestic shipbuilding industry
by requiring that the subventions shall be paid only to domestic-built
ships.
In many cases the financial aid granted by the mail contracts may
be thought to be in excess of the cost of the service actually rendered,
but it should be remembered (1) that subventioned ships are required
to operate at fast speed, which is disproportionately more expensive
than operation at moderate speed; (2) that the operation of vessels
on fixed routes and on fixed schedules often prevents the vessels from
receiving full cargo and precludes a change of route to suit the
changing conditions of trade; and (3) that most of the mail steamers
are constructed and equipped in a special manner to fit them for use
as auxiliary cruisers and transports in time of war and are subject
to the call of the naval authorities on short notice.
The original grants made to the Cunard Line by the British Gov-
ernment were large and probably contained a large element of bounty.
At that time England and the United States were keen rivals for
supremacy on the seas, particularly in the trans-Atlantic trade. The
steamship was then largely an experiment and the operation of
steamships was "an infant industry " which required protection. The
purpose of the large grants made by the British Government was not,
however, merely to assist in the establishment of a steamship line
for the line's sake, but more particularly to promote rapid communi-
cations between England and her American and Australian posses-
sions. This motive is clearly seen in the fact that the original Cunard
contract stipulated that a call should be made at Halifax on both the
outbound and the return voyages and that a connecting line should
be operated between Halifax and Quebec.
The importance attached to the mail subvention contracts as a
means to promoting rapid communications is clearly shown also by
the contract with the Peninsular & Oriental Steam Navigation Co.,
which provides for a subsidized service beginning at Brindisi (Italy),
and not at an English port, the Government sending the Far Eastern
mails by fast steamers across the English Channel and making use
of fast express trains across the Continent of Europe to Brindisi.
The importance of this motive is shown also in the contracts made
many years ago by the Government of New Zealand with the Oceanic
Steamship Co., an American line, operating between Australia, New
Zealand, and San Francisco. The contract was given to this line
rather than to the Peninsular & Oriental Steamship Co., because by
forwarding the British mails to San Francisco use could be made of
the transcontinental railroads of the United States, which had then
been completed, and this use of the railroads would reduce the time in
transit by a number of days. This contract..like the contracts of other
British colonies, shows that the colonies themselves appreciated the
importance and value of rapid and regular communication with the
mother country.
With only two important exceptions, all financial aid extended by
the British Government has been in the form of postal and Admiralty
subventions. The first important exception was in the case of the
contract made with the Pacific Steam Navigation Co., in 1840, grant
ing a subsidy for the operation of steamships along the west coast of
South America. A more recent exception is to be found in the sub-
INTRODUCTION AND SUMMARY.
17
sidy granted the Elder-Dempster Line operating between Jamaica
and England, the purpose of this subsidy being to encourage the
trade in agricultural products of Jamaica.
The United States and Germany, whose merchant navies rank next
in importance to that of Great Britain, have likewise extended finan-
cial aid to shipping only in the form of mail subventions. The United
States instituted this policy in 1847, as stated above, and for a time
made much more liberal payments than the British Government, but
in spite of the greater aid the American lines did not prosper. In
the case of the Collins Line, which received most generous aid for
about 10 years, the terms of the contract were probably too exacting
to permit of the successful operation of its vessels from a purely.
commercial standpoint, the requirements as to speed and frequency
of sailings being such as to prevent these ships from securing a satis-
factory amount of cargo. In the opinion of many some of these lines
might have been successful if the subventions had not been withdrawn
in toto. The United States did not, however, pursue the policy of
mail subventions continuously until the passage of the mail-subsidy
act of March 3, 1891, which is still in force.
Germany instituted the policy of mail subventions in 1886, when
a contract was concluded with the North German Lloyd for service to
the Levant and the Far East. These grants are considered by many
as having been made as much for the extension of German trade and
influence as for the development of German shipping. One of the
most striking features about the whole commercial policy of Ger-
many is the fact that its commerce and shipping have been so
effectively coordinated that each contributes directly to the de-
velopment of the other. The only other mail subvention paid by
the German Government has been to the German East Africa Line,
although aid of an indirect character, namely, preferential railway
rates, has been granted to both this line and the German Levant Line.
The largest of the German steamship companies, one of the largest
in the world, in fact-the Hamburg-American Line-has received
comparatively little financial assistance from the German Govern-
ment. For a time it shared with the North German Lloyd a subven-
tion paid for the carriage of mails to China and Japan, but the
amounts received in this manner were small.
It is interesting to observe also that probably the most remunera-
tive service of the North German Lloyd has been the service to New
York, and that the amounts received by this company from the
United States Government for the transportation of United States
mails to Europe have been on the average about one-fourth as
large as the subventions which this company has received from the
German Government for services to Australia and the Far East.
The subventions paid by the Norwegian Government, whose mer-
chant marine ranks fourth among the merchant navies of the world,
have been almost exclusively for the maintenance of mail lines along
the coast of Norway on routes that would be unprofitable without
financial assistance of this character. The small amounts paid in
mail subventions by Sweden and Denmark are also largely of this
character.
The French Government has for years paid liberal mail subventions
for routes to the United States, the West Indies, South America,
41987°-16- -2
18
GOVERNMENT AID TO MERCHANT SHIPPING.
the west coast of Africa, Corsica, Australia, China, and Japan. The
subventions paid to these lines are regarded as having contributed
more toward the maintenance of the French merchant marine than
the large sums expended in bounties and subsidies since 1881.
Japan has paid subventions for the transportation of mails prac-
tically ever since that country adopted the European type of steam-
ship. The original grants were mainly for service in the Far East,
but in recent years grants have been made for services to Europe and
to North and South America.
The mail subventions paid by Italy, the Netherlands, Spain, and
Portugal have had for their object in most cases the improvement of
communication between the mother country and the colonies. This
is true also of a number of the contracts made by the French Govern-
ment with several French steamship lines.
Payments made under the mail subvention contracts between the
Austrian Government and the Austrian Lloyd Steamship Co. may be
regarded more in the nature of subsidies than of subventions since
the grants have been out of all proportion to the amount of postal
service rendered. In other words, under the guise of mail subven-
tions the Austrian Government has really paid subsidies whose prime
purpose has been to promote Austrian trade and shipping.
The Dominions of Canada and New Zealand, the Commonwealth
of Australia, and the Union of South Africa pay large amounts an-
nually in the form of mail subventions. When these subventions
were established the primary object was to promote faster and more
regular communication with the mother country. In more recent
years, however, the commercial motive has entered into the payment
of these grants. This motive is clearly shown, for example, in the
recent contracts of the Canadian Government, which require that
in the assignment of cargo space preference shall be given to Ca-
nadian goods and to Canadian shippers.
Fon the outset the mail subvention contracts have been exacting
in their requirements as to speed, sailing time, schedules, and ports
of call and in the matter of deductions for noncompliance with con-
tract stipulations. The tendency has been to extend the requirements
until to-day the ordinary, mail subvention contract gives the Govern-
ment not only a very large control over the company's affairs, but also
an active participation in its deliberations and a share in its profits.
For example, the Austrian Lloyd contract provides that three mem-
bers of the board of directors, including the chairman, of the com-
pany, shall be nominated by the Austrian Government; that all pas-
senger fares and freight tariffs shall be submitted to the Minister of
Commerce for approval; that the Government shall share in the net
earnings above 6 per cent, etc.
The recent contracts of the French Government with the Com-
pagnie Générale Transatlantique and the Compagnie des Messageries
Maritimes give the French Government practically as much control
over the affairs of these companies as that exercised by the Austrian
Government in the case of the Austrian Lloyd, although they do not
provide for Government directors.
The contracts of the Japanese Government with the leading Japan-
ese steamship lines give the Government as much control as it is pos-
sible to give over privately owned lines.
INTRODUCTION AND SUMMARY.
19
BOUNTIES OR SUBSIDIES.
General bounties or subsidies to merchant shipping are of com-
paratively recent origin if an exception is made of the original
grants made by the British and American Governments to the lines
established about the middle of the last century, which were at the
outset so liberal as to contain a large element of bounty or subsidy.
The system of paying general bounties to shipping may be said to
have been instituted by France, which entered upon this policy in
1881, and has made a more extensive use of bounties than has any
other country.
The first subsidy law in France, that of January 29, 1881, was
adopted after careful investigation by a special commission and was
intended to assist the domestic shipbuilding industry as well as the
shipping under the French flag. It was hoped that the bounties
provided under this law would check the decline in the French
merchant marine that had been going on steadily since the steamship
became the principal carrier of the world's over-seas trade.
•
France has made frequent and costly experiments with various
forms of bounties without accomplishing the results hoped for. Some
of the results obtained by certain of the bounties have been far-
fetched, as, for example, the development of great fleets of large
sailing vessels which found it profitable, under the liberal navigation
bounties provided by the law of 1893, to sail around the world much
of the time in ballast.
Much of the benefit that might otherwise have accrued from the
liberal bounty expenditures of France have been negatived by the
almost irreconcilable conflict between shipbuilders and shipowners.
As stated above, French subsidy legislation has attempted to distrib-
ute bounties between construction and navigation in such a way as to
promote the interest of both the shipbuilder and the shipowner. Ap-
parently this result has not been attained, since the shipowners accuse
the shipbuilders of absorbing not only the construction bounty but
much of the navigation bounty by raising unnecessarily the prices on
domestic-built ships.
By reason of extensive experiments the French system has un-
doubtedly been improved, but with each new law on the subject the
requirements have become more exacting. Since the advent of the
steamship the natural economic conditions in France have not been
favorable to the development of a large merchant marine. A serious
obstacle has been the lack of an extensive iron and steel industry
capable of producing iron and steel as cheaply as they can be pro-
duced in Great Britain, Germany, and the United States. The rivalry
of French ports and the character of the exports of France have been
handicaps. Although the exports are high in value, they are low in
tonnage and do not provide full return cargoes as do the exports of
Great Britain and Germany.
It is extremely doubtful whether any system of bounties can under
present conditions sufficiently overcome the handicaps of natural
conditions so as to enable France to take higher rank among the
merchant navies of the world.
Although the results obtained under the bounty systems of France
have not been encouraging, those systems have nevertheless been used
as models by Italy, Austria, Hungary, Japan, and Spain.
20
GOVERNMENT AID TO MERCHANT SHIPPING.
Italy adopted a system similar to that of France about four years
after the passage of the first French subsidy law, that is, in 1885..
Moreover, Italy has made changes in her subsidy system about as
frequently as France, and on the whole has been little, if any, more
successful.. Both countries have been handicapped by the lack of a
highly developed iron and steel industry such as would enable them
to manufacture iron and steel vessels cheaply. Italy has been further
handicapped by the heavy burden of taxation and lack of coal.
Japan rivals France in the extent to which Government aid has
been extended to merchant shipping, but has been much more success-
ful. The Japanese merchant marine has developed more rapidly
than that of any other country during the past 35 years. In 1880
the economic condition of Japan, measured by European standards,
was poor. Likewise the shipping industry of the country was com-
paratively insignificant, and consisted largely of junks suitable only
for navigation in coastal waters or trade with China and the neigh-
boring islands.
The industrial development of Japan since that country adopted
European methods of manufacture and commerce has been truly
remarkable, and accounts in a large measure for the development of
the merchant marine. The Japanese merchant marine has developed
from almost nothing, and shows a remarkable rate of increase largely
for that reason. Nevertheless, the increase in Japanese shipping
has been substantial, and it is due in part to the payment of liberal
subsidies.
The construction and operation of steamships were new industries
in Japan. Both had to be inaugurated and built up. The Japanese
Government realized that if she intended to build her own vessels
she must foster the shipbuilding industry until her people had learned
the European methods of manufacture, and if she intended to oper-
ate merchant vessels in competition with those of European countries
she must assist Japanese shipowners. So eager was Japan to have
her shipping increase along with her trade and to extend the influence
of Japan in the affairs of the world that the artificial stimulus of a
liberal bounty system was considered necessary.
The bounty systems of the Kingdoms of Austria and Hungary are
quite similar to that of France. Both were instituted in 1893, the
Hungarian antedating the Austrian by about six months. In the
Austrian law, despite the use of other terms, the grants really amount
to general navigation and construction bounties. The laws have been
changed from time to time in an attempt to make the system pro-
ductive of better results, but comparatively little success has been
attained, although large amounts have been paid out in bounties.
The fact of the matter is that with its seacoast limited in extent and
remote from the richer agricultural, mineral, and manufacturing
sections of the Empire Austria-Hungary is under a serious handicap.
The Danube and the Elbe are used to a great extent for the trans-
portation of Austrian exports, and Hamburg is therefore in many
cases a much more convenient port than either Trieste or Fiume. It
is a question whether under present conditions or those that are
likely to obtain in the near future Austria or Hungary can over-
come the natural handicaps, even with the expenditure of large sums
in bounties.
INTRODUCTION AND SUMMARY
21
Spain now rivals France, Italy, and Japan in the extent of Gov-
ernment aid to shipping. For many years the only direct aid was in
the form of mail subventions for rapid communication with the
Spanish colonies. A subsidy system was not introduced until the
enactment of the law of June 14, 1909. This system closely follows
that of France. It is difficult as yet to say what the net result of
the law has been. It is interesting to note that the law has been
suspended since the outbreak of the present war in Europe, largely
at the request of a majority of the subsidized lines, which were
making such large profits as to be quite independent of the subsidies
and desired to avoid the restrictions imposed by the subsidy laws.
SUBVENTIONS TO FOREIGN STEAMSHIP LINES.
A number of countries pay subventions to foreign steamship lines.
The principal purpose of such grants has been to utilize foreign
steamship services operating to remote points.
Italy has for many years paid a subvention of 70,000 lire ($13,510)
to the Netherland Steam Packet Co. for the transportation of Italian
mails between Genoa and the Dutch East Indies.
Belgium has paid subventions, either in direct grants or in reim-
bursement of pilotage dues, port charges, etc., to three German lines,
namely, the North German Lloyd, the German-Australian, and the
Kosmos, and to a Danish line, the United Steamship Co. of Copen-
hagen, for the purpose of having the steamers of these lines call
regularly at Antwerp. Bulgaria had the same object in view in
making annual grants to the German Levant Line and to Fraissinet
et Cie., a French steamship line, for making regular calls at Burgas
and Varna.
Other countries that have paid or are paying subventions to for-
eign steamship lines are: Brazil, which contracted in 1913 with four
Italian lines for a service between Brazil and Italy; Chile, which
formerly granted a subvention and now grants valuable wharfing
privileges at Valparaiso to the Pacific Steam Navigation Co., a
British line, for carrying mails between Chile, Peru, and England;
Mexico, which has granted subventions to American, British, Cana-
dian, and Japanese lines; and New Zealand, which paid a subvention
to the Oceanic Steamship Co., an American line, for the transporta-
tion of mail between Auckland and San Francisco.
POLICY OF GOVERNMENT AID.
·
Great Britain.-England was the first country after the advent of
the steamship to pay subsidies or subventions. It is probably accurate
to refer to the original grants to the Peninsular & Oriental Steam
Navigation Co. and the Cunard Line as combinations of subsidy and
subvention, since the element of bounty predominated in those years,
although the endeavor to promote faster communications to India.
and Australia and to Canada was also strongly emphasized. In its
early stages rapid steam navigation was a good deal of an experiment
and expensive, as the experience of the several subsidized American
lines of that period abundantly proved, and the British Government
deemed it expedient to contribute toward the expense of maintain-
ing the new lines.
22
GOVERNMENT AID TO MERCHANT SHIPPING.
An infant industry was granted protection, however, not merely
for the sake of the industries and trade of Great Britain, but also for
imperial purposes or, in other words, to bring the colonies into
closer communication with the mother country. The colonial sub-
vention element in the early grants to the British steamship lines
is to be seen in the fact that the first contract with Samuel Cunard
called for a service not merely between Liverpool and Boston but
also for a call at Halifax on both the outbound and the homeward
voyages, and for a connecting line, with two river steamers, between
Halifax and Quebec.
One of the striking features of the subvention policy of Great
Britain is that, with few exceptions, it has consisted exclusively of
grants for the operation of fast mail steamships between the mother
country. and its colonies. An important exception at the outset was
the grant to the Pacific Steam Navigation Co., which then operated
exclusively on the west coast of South America. Another exception-
and a more recent one-was the subsidy paid to the Elder-Dempster
Line for a service between Jamaica and England, the primary pur-
pose of this grant being the promotion of the banana trade of
Jamaica.
Cargo ships have received no aid from the British Government.
No bounties have been paid on the construction of any ship nor have
general navigation bounties been given. It might be suggested that
the loan at low rates of interest to the Cunard Co. for the building
of the Lusitania and the Mauretania is a construction bounty to the
extent of the saving in interest, but since these vessels were con-
structed to meet admiralty requirements and were to have unusual
speed, the saving in interest really amounts to an admiralty sub-
vention.
The financial aid extended to the merchant shipping of Great
Britain has been limited to a small proportion of the total tonnage
under the British flag. The United States Commissioner of Naviga-
tion, in his annual report for 1894 (p. 91), estimated that the tonnage
then in receipt of financial aid constituted not more than 3 per cent
of the total. It is probable that the proportion is no higher now.
Attention has been called to the fact that cargo or freight steamers
have never received aid of any kind from the British Government,
and this is true also of a number of lines of passenger steamers, for
example, the White Star Line, which has been a competitor of the
Cunard Line in the trans-Atlantic trade and has been far more suc-
cessful as an earner of dividends than has its subsidized rival. This
is true also of the Anchor Line, the Leyland Line, and the Red Star
Line, in the same trade.
A striking feature of the policy of England is the fact that at the
time when the first contracts were made with the Cunard Line and the
Peninsular Line the policy of free trade had only recently been intro-
duced, and that not long after (from 1849 to 1854) England dis-
carded all of the protectionist features of her navigation laws which
had been in force for about two centuries.
Among the laws that were repealed at that time were those which
restricted to British ships the coasting trade of the United Kingdom,
the trade between the United Kingdom and the colonies, and the trade
among the several colonies; those which provided that no produce
of Asia, Africa, or America could be imported for consumption into
INTRODUCTION AND SUMMARY.
23
the United Kingdom from Europe and that none could be imported
from any other place except in British ships or in the ships of the
country of production; and those providing that certain specific
articles of European production could only be imported for con-
sumption when transported in British bottoms. At the same time
Parliament repealed the law giving the Government power to impose
differential duties on the ships of foreign nations that levied similar
duties on British ships and the law restricting British registry to
British-built ships.
The continuity of subvention payments to the lines originally re-
ceiving such payments is another feature of the system of Govern-
ment aid as followed by Great Britain. All of the original subven-
tioned lines the Peninsular & Oriental, the Cunard, the Royal Mail
Steam Packet Co., and the Pacific Steam Navigation Co.-are still in
existence and are still receiving mail subventions. The support of
the British Government has been constant. In this respect its policy
is in marked contrast to that of the United States, which country has
been spasmodic in its support of lines established under subventions.
The United States.-The only direct financial aid extended by the
United States has been the payment of mail subventions. Such pay-
ments may be divided into three periods, namely, 1847 to 1857, 1864
to 1877, and 1891 to date. Prior to the enactment of the postal sub-
sidy law of March 3, 1891, the efforts of the United States along this
line were somewhat spasmodic and lacked definite purpose. Appar-
ently too much was expected within a short time and serious mis-
takes were made, the two most prominent being the excessive speed
required of the Collins Line and the use of a corrupt lobby in 1872
to obtain an additional subvention for the Pacific Mail Steamship
Line. The experience of the United States with mail subventions
has not, therefore, been overly encouraging.
The merchant shipping of the United States has entered upon a
new era since the outbreak of the war in Europe. The privilege
granted under the ship-registry act of August 18, 1914, of registering
foreign-built ships in the United States has been and probably will
continue to be of great assistance in the development of the American
merchant marine. Moreover, as a result of the extensive development
of the shipbuilding industry during the past 18 months domestic
yards will probably be able in the future to compete on more nearly
even terms with the shipyards of Great Britain.
Germany. The financial aid extended to the merchant shipping of
Germany has been comparatively small and may be said to have been
given as much for the extension of German trade and influence as
for the development of German shipping. The largest of the Ger-
man lines, the Hamburg-American Line, which is one of the largest
in the world, has developed rapidly without Government aid. Much
of the development of the next largest German line, the North Ger-
man Lloyd, has been accomplished on the unsubsidized services. The
only important mail subvention contracts have been with the North
German Lloyd for services to the Far East and Australia and with
the German East Africa Line for services to the German East
African colonies.
The rapid development of the German merchant marine is due
chiefly to favorable economic conditions. The imports and exports of
Germany are not only large but also well balanced in tonnage. More-
24
GOVERNMENT AID TO MERCHANT SHIPPING.
over, the foreign trade is concentrated largely at Hamburg and
Bremen, which assures a maximum of cargo for ships calling at these
ports. Much of the success of German shipping is attributable also
to the efficient coordination of the industrial and commercial activities
of the country.
1
France.-France has been called the "bounty-giving nation par
excellence." The policy of granting aid to the merchant shipping
of France has been so long in operation as to have become virtually a
tradition.
The policy of granting mail subventions, which seems to have
produced better results than the bounty system, was instituted on a
formal contract basis as early as 1851 and has been in force since
that time. The bounty system was not introduced until 1881 and has
been in force continuously since that time, although a number of im-
portant changes have been made in the original scheme. Each suc-
ceeding subsidy law has been more exacting in its requirements and,
on the whole, more liberal in its payments than the preceding one.
The amendments, however, do not appear to have had the desired
effect, for no substantial benefit has resulted from the large amounts
expended.
As has been stated above (p. 19), France has attempted by the
payment of liberal bounties to overcome serious handicaps of her
present economic condition.
Italy.-Italy has followed the example of France in attempting to
overcome natural handicaps by the payment of liberal subventions
and subsidies. An elaborate system of bounties, which was intro-
duced in Italy in 1885, or about four years later than a similar
system was adopted in France, has not on the whole been successful,
although large amounts have been expended.
The mail subventions have probably been more successful than
general subsidies and the large expenditures made on this account
have been warranted to a great extent as a part of the Italian pro-
gram of greater influence in the world's affairs and because of the
use of these ships as an auxiliary for the navy.
Austria-Hungary.-The policy of Austria-Hungary is really the
policy of the Kingdoms of Austria and Hungary acting in their sep-
arate capacities. The policy of granting financial aid to shipping has
been in operation in Austria since 1836 when the State assisted in the
organization of the Austrian Lloyd by guaranteeing the interest on
the capital borrowed by the promoters of the company. From that
day to this the relations of the Austrian Lloyd, which has the largest
amount of tonnage under the Austrian flag, and the Austrian Govern-
ment have been intimatė.
The first formal mail contract entered into by the Austrian Gov-
ernment was in 1851 and was with the Austrian Lloyd. The pay-
ments made to this line have been exceedingly liberal and are
regarded by many persons as disproportionate to the benefit received.
From 1872 to 1888 the Austrian Lloyd was the recipient of a sub-
vention from Hungary as well as Austria, and during this period
used the name of Austro-Hungarian Lloyd. The Kingdom of Hun-
1 Meeker: History of Ship Subsidies, p. 42.
INTRODUCTION AND SUMMARY.
25
gary has been liberal in its payment of mail subventions not only to
the Austro-Hungarian Lloyd but also to other companies.
Both Kingdoms adopted in 1893 a bounty or subsidy system similar
to that of France, and since that time they have expended large
amounts for subsidies.
Japan. The policy of granting direct financial aid to merchant
shipping was adopted by Japan not long after that country adopted
the European type of ship. The original grants were mail subven-
tions to promote steamship services in the adjacent Far East. A lib-
eral subsidy policy was instituted in 1896 under a law resembling in
many respects the subsidy laws of France. The expenditures of
Japan for mail subventions and subsidies have been very liberal.
The fact that the merchant marine of Japan has developed very rap-
idly since the institution of the subsidy policy has been attributed
by many to the liberal State aid which it has received, but account
should be taken of the fact that Japan has had a remarkable indus-
trial and commercial development during this period. Although the
principal Japanese steamship companies have been in receipt of Gov-
ernment aid since 1888 and have developed rapidly, their financial
statements for recent years show that they have not got beyond the
need for financial assistance from the State. In other words, the
"infant industry " has never grown up.
Scandinavian countries.-Norway, Sweden, and Denmark have
merchant navies that rank among the largest in the world. These
countries rank high in respect to per capita ownership of merchant
shipping. The development of the merchant marine of Norway,
has far outstripped that of France, and has been due in a very small
degree, if any, to financial aid granted by the Norwegian Govern-
ment. The grants made to Norwegian shipping companies have been
primarily and almost exclusively for the maintenance of mail serv-
ices along the coast of Norway. The high rank of Norway as a ship-
ping nation is due to the seafaring qualities of her people, to her
geographic location, and to the fact that because of her limited in-
dustrial development merchant shipping offers greater financial
rewards and better opportunities for the employment of her people.
The policy of Sweden and Denmark has been similar to that of
Norway in that the financial aid by the Government has been limited
chiefly to the payment of small amounts for mail and trade communi-
cations, mainly within the limits of the Baltic Sea. None of the
Scandinavian countries has adopted a general bounty system similar
to that of France. For a number of years Denmark paid a substan-
tial subsidy to lines operating to England, but this subsidy was with-
drawn in 1910. Its primary object was to promote the export of
agricultural products of Denmark, and it is significant that this
subsidy was withdrawn when Denmark feared retaliation on the part
of England.
The Netherlands.-The policy of the Netherlands has been dis-
tinguished by the fact that no bounties or subsidies have been paid.
The direct aid extended by the Government has been exclusively for
mail subventions to improve steamship and mail communication with
the far-distant colonies. It is worth noting that the Netherlands.
permits ships of foreign nations to engage in the rich trade between
the Dutch East Indies and Europe.
26
GOVERNMENT AID TO MERCHANT SHIPPING.
Belgium. The most striking feature about the policy of Belgium
has been the indifference to a Belgian merchant marine. Belgium,
which has a very large over-seas trade, has been content to have most
of this trade carried in foreign bottoms and has gone so far as to
subsidize directly and indirectly three German lines and one Danish
line.
Spain and Portugal.-Spain has pursued the policy of granting
mail subventions since 1861, when a contract was made with the
Compania Trasatlantica Espanola for the regular transportation
of mails to Santo Domingo, Cuba, and Porto Rico, and it was not
until 1909 that a general bounty or subsidy law was instituted. The
payments of financial aid to the merchant shipping of Portugal have
been on account of mail subvention contracts for regular transporta-
tion on routes between Portugal and her several colonies.
Latin-American countries.-Subventions are paid by five Latin-
American countries, namely, Brazil, Chile, Guatemala, Mexico, and
Peru. All of these countries pay subventions to foreign lines for the
purpose of having the benefit of the over-seas communications. All
except Guatemala pay subventions to national lines also, but the
amounts thus paid by Mexico were small and were for inland river
lines.
In connection with the subsidy policy of Brazil it is interesting to
note that the first subsidy granted by the Brazilian Government was
to an American line, the United States & Brazil Steamship Co.,
under a contract made on August 29, 1865. During the 10 years
this contract was in force this line received an annual subsidy of
$150,000 from the United States and $100,000 from Brazil. In more
recent years Brazil has subsidized a line operated by the Lloyd
Brazileiro between Brazilian ports and New York City.
The Mexican Government has also subsidized lines operating be-
tween ports of Mexico and the United States.
STATE-OWNED STEAMSHIP LINES.
A number of countries own steamship lines. Belgium has owned
for many years a number of vessels that have been operated between
Ostend and Dover in connection with the Belgian State Railways.
Lloyd's Register shows that the Belgian Government owned, in 1914,
11 steamers, 3 turbine and 8 paddle-wheel boats. The turbine
steamers are of about 1,700 tons gross capacity and have a speed of
24 knots. Three of the other steamers have a speed of 22 knots,
and three others a speed of 21 knots. It is interesting to note that
the speed of the 24-knot steamers is exceeded only by that of the
Mauretania.
The relations between the Russian Government and three of the
most important Russian steamship lines have been very close for a
number of years. Almost from its organization, in 1878, the Volun-
teer Fleet has been under the control of the Ministry of the Marine
and the Ministry of Commerce and Manufactures. It would appear
that the relations between the Russian Government and the Volun-
teer Fleet are even closer than the relationship between the United
States Government and the Panama Railroad Co. Line, as is indi-
cated by the provisions of the charter and by-laws of this company,
which are reproduced in full in Appendix E on page 249.
INTRODUCTION AND SUMMARY.
27
The property of the Russian Danube Steamship Co. was pur-
chased by the Russian Government in 1903, when the company went
into liquidation and is now managed by a board appointed by the
Chief of the Bureau of the Merchant Marine.
Upon a reorganization of the Archangel-Murman Steamship Co.,
in 1895, the Russian Government subscribed for about 56 per cent.
of the new capital stock.
By a law of April 5, 1908, the Italian Government intrusted to
the State Administration of Railroads the operation, after July 1,
1910, of certain lines of navigation between the mainland and Sar-
dinia and Sicily. Twelve steamships, with an aggregate gross ton-
nage of 30,250 tons, are operated in these services. Four of these
vessels have a gross tonnage ranging from 3,262 to 3,497 tons and
have a speed of 20 knots.
The bulk of the tonnage under the Roumanian flag is owned by
the Government. In 1897 the Roumanian Government began the
operation of a line of mail steamships between the Black Sea port
of Constantza and Constantinople and Alexandria, and a line of
cargo steamers between the Danubian ports of Roumania and Rotter-
dam. In addition, the Government operates a local line of steamers
on the Danube. Four of the five mail steamers have a speed of 18.5
knots, while the other has a speed of 17.8 knots. Three of these
steamers have a gross tonnage of more than 3,100 tons each. The five
cargo boats that are operated on the line to Rotterdam range in
tonnage from 2,125 to 2,255 gross tons, and three have a speed of 9.5
knots, while the other two have a speed of 10.3 knots.
Brazil owns the Lloyd Brazileiro, which is the largest steamship
company flying the Brazilian flag.
The Swedish State Railways own three steamers, two of which are
of more than 3,000 tons gross capacity and 16.5 knots speed.
Western Australia owns a line of small steamers, which "was
established in 1913 to save to the settlers of the south coast the ad-
vantage of steamer service, which was in danger of being discon-
tinued by the Commonwealth government owing to the prohibitive
demands made by the private company formerly operating this
line.” 1
The Imperial Government Railways of Japan own four steamers-
two of 1,521 gross tons capacity and 18 knots speed and two of 3,107
gross tons capacity and 15 knots speed. These steamers are operated
in connection with the Government Railways in the Korean Channel
service between Shimonoseki and Fusan.
The United States Government operates, through the Panama
Railroad Co., a line of three steamships plying between New York
and Colon. The Government owns all of the stock of the Panama
Railroad Co. excepting a few shares.
The State Railroads of France own eight steamers, which are
operated in the channel service between France and England. Two
of these steamers, the Newhaven and the Rouen, are turbine steamers
with a capacity of 1,656 gross tons and a speed of 23.5 knots.
1 From an unpublished monograph on the Government steamship service of Western
Australia, prepared in January, 1916, by the Legislative Reference Division of the Library
of Congress.
28
GOVERNMENT AID TO MERCHANT SHIPPING.
STATE CONTROL OF PRIVATELY OWNED STEAMSHIP LINES.
A striking tendency in the more recent mail contracts has been the
provision for a large participation by the State in the affairs of
steamship lines receiving the subventions. For example, the con-
tract of the Austrian Lloyd Steamship Co. provides that three
directors out of nine shall be named by the Austrian Govern-
ment, the chairman to be named by the Emperor and two other
members by the Minister of Commerce. The contract also provides
that routes, ports of call, and freight rates shall be subject to ap-
proval by the Minister of Commerce, who may order changes therein.
Important transactions affecting the property of the company must
also be approved by the Minister of Commerce.
Reference has already been made to the close relations between the
Russian Government and several of the larger Russian steamship
lines, in particular the Russian Volunteer Fleet.
Under the recent mail contracts made with the leading Japanese
steamship lines the Japanese Government has practically as much
control over the affairs of these companies as would be possible un-
der direct Government ownership. The extent of governmental con-
trol is indicated by the fact that all passenger fares and freight
charges are subject to modification by the Minister of Communica-
tions, who must be consulted also in regard to arrangement of
routes, ports of call, number of voyages to be made, and time of
voyage.
Attention should also be called to the more recent mail contracts
of the French Government, which provide for a large participation
by the French Government in the affairs of these companies.
In a mail subvention contract for the Java-China-Japan Line the
Government of the Dutch East Indies stipulated that the election
of directors and representatives of the company, as well as the adop-
tion of statutes and by-laws, should be subject to the approval of the
Dutch Government, and that the Government should have the right
to be represented at all meetings of the company and have power to
examine all of its books and papers.
Even in connection with the small subsidies paid by the Norwegian
Government there are a number of requirements restricting the in-
dependence of action on the part of the company. For example, a
common requirement is that a certain amount be set aside for boiler-
replacement fund, while another stipulation is that the Government
may require special financial statements to be kept as it may direct.
STATE PARTICIPATION IN PROFITS OF STEAMSHIP COMPANIES.
The first mail contract providing for a division of steamship
earnings with the State was that of the Royal Mail Steam Packet
Co., which was made in 1868 and provided that the British Govern-
ment should receive one-half of all profits in excess of 8 per cent.
The contract of the Austrian Lloyd Steamship Co. has long pro-
vided for a division with the Austrian Government of all profits in
excess of 6 per cent. On the one hand this policy may be urged as
tending to limit subventions to an amount sufficient to pay a fair
return on the capital invested. On the other hand, however, this
INTRODUCTION AND SUMMARY.
2.9
policy has been criticized as discouraging enterprise. Nevertheless,
the tendency is strongly toward a division of profits above a fair
return on the investment.
Under a contract made in 1895 with the Royal Hungarian River
& Sea Navigation Co. the Hungarian Government received one-third
of the net earnings between 5 and 7 per cent, and one-half of the
net earnings above 7 per cent.
The recent contracts of the French Government with the Com-
pagnie Générale Transatlantique, the Compagnie des Messageries
Maritimes, and the Compagnie de Navigation Sud-Atlantique pro-
vide that the Government shall share in all profits in excess of 5
per cent after proper allowances have been made for interest, de-
preciation, and amortization.
Bulgaria, by reason of its ownership of one-fourth of the capital
stock of the Bulgarian Steam Navigation Co., has participated in
the profits of that company.
The Russian Government, which owns about 56 per cent of the
capital stock of the Archangel-Murman Steamship Co., requires
that three-eighths of all net profits in excess of 6 per cent shall be
applied toward the diminution of the subsidy received by this com-
pany.
The Dutch East India Government receives from the Java-China-
Japan Line two-fifths of the net earnings of this company of more
than 5 per cent but less than 9 per cent, and three-fourths of the net
earnings in excess of 9 per cent.
Chapter I.-THE UNITED STATES.
In point of total tonnage the merchant marine of the United States
has long been second among the merchant navies of the world, but
with respect to tonnage engaged in over-seas trade it has for many
years ranked lower. At the outbreak of the war in Europe the ton-
nage of ships registered for foreign trade was only 1,076,152 net tons,
or much less than the over-seas shipping of Germany or Norway.
That the total tonnage under the flag of the United States has con-
tinued to increase, despite a falling off in over-seas tonnage, is due
entirely to the remarkable development in the last 30 years of the
coasting trade, including that of the Great Lakes, which is reserved
to American-built ships flying the American flag. The reservation
of the coasting trade to American ships has been a great source of
strength to American shipping and a great boon to American ship-
yards. The importance of the coasting trade has been largely en-
hanced by the building of the Panama Canal, which has greatly less-
ened the distance between the Pacific and the Atlantic coasts.
The coasting trade of the United States includes not merely the
trade along the Atlantic, Gulf, and Pacific coasts of continental
United States and between the Atlantic and the Pacific coasts, but
also the trade between continental United States and Alaska, Hawaii,
and Porto Rico. The distances traversed by many of the ships in
the coasting trade of the United States are greater than the distances
covered by many of the ships in the foreign trade of European
nations.
As examples of the long distances traversed by vessels in the
United States coasting trade, the following services may be listed:
The service of the Morgan Steamship Co. (Southern Pacific Railway)
between Galveston and New Orleans, on the one hand, and New
York on the other; the iron ore and coal traffic between Duluth and
Cleveland or Buffalo; and the service of the American-Hawaiian
Steamship Co. operating between Honolulu and New York and Bos-
ton via Seattle, San Francisco, and the Panama Canal.
It is probably safe to say that the freight tonnage carried in the
coasting trade of the United States exceeds the total freight trans-
ported in all the ships of any other country, with the possible excep-
tion of Great Britain.
No other country has such extensive stretches of coast with so many
valuable ports that are of easy access and open at all times of the
year and such varied commodities seeking water transportation.
The United States has a greater number of important ports than
any other country in the world. New York, Boston, Baltimore,
Philadelphia, Norfolk, New Orleans, Galveston, San Francisco,
Seattle, Tacoma, Sitka, and Honolulu are only a few of the
more important ports. In this connection the following extract
from a recent report of the Bureau of Foreign and Domestic Com-
30
THE UNITED STATES.
31
merce on "Ports of the United States," pages 10 and 11, will be of
interest:
Four ports in the United States have entrance or main channels with a mini-
mum depth at mean low water of 40 feet or more. These are New York, which
has a dredged channel 40 feet deep; San Francisco, with a natural entrance
channel 60 feet deep and depths of from 30 to 60 feet generally within the
harbor; and Seattle and Tacoma, whose harbors are reported by the United
States Coast and Geodetic Survey to be "very deep, usually too deep for an-
chorage except close to the shore."
A vessel with the draft of the Aquitania or the Imperator can proceed to the
wharves of the above-named ports at any stage of the tide and to the wharves
at the port of Boston at high tide. If not fully loaded, vessels of this size could
probably dock at high tide at the ports of Portland, Me., Newport News, and
Norfolk. When the channel in the Delaware River as far as Philadelphia has
been dredged to a depth of 35 feet at mean low water, the largest vessels will be
able to proceed to that port also at high tide.
Channels with a minimum depth of 35 feet at mean low water are to be
found at the ports of Baltimore, Boston, Newport News, and Norfolk. Six
ports, namely, Galveston, Los Angeles, New Orleans, Pensacola, Philadelphia,
and Portland, Me., have 30 or 31 foot channels. A channel 35 feet deep is being
dredged at the port of Philadelphia and channels 30 feet in depth at the ports
of Portland, Oreg., and Providence.
Vessels with a draft of not more than 31 or 32 feet can enter the jettied
channel at the mouth of the Mississippi River, but the depth of the river from
a point just inside of the jetties to the city of New Orleans is deep enough for
any draft of vessel now afloat.
The freight available for the coasting trade is enormous. Annually
millions of tons of iron ore, coal, wheat, and lumber are carried on
the Great Lakes-a commerce that far exceeds in tonnage that which
passes through the Suez Canal.
On the Atlantic seaboard millions of tons of soft coal are carried
in ships from Baltimore, Newport News, Norfolk, and Philadelphia
to various points in New England. Industrial New England would
be seriously handicapped if it had to pay rail instead of water
freights on its soft coal. Millions of tons of hard coal are carried
from Philadelphia and the port of New York to New England;
thousands of bales of cotton from Galveston, New Orleans, Savannah,
Charleston, and Wilmington, N. C., to New York and Boston; mil-
lions of feet of lumber from Jacksonville to New York; millions of
gallons of oil from Port Arthur, Tex., to Baltimore, Philadelphia,
New York, and other North Atlantic ports; huge quantities of sul-
phur from Sabine, Tex., to Portland, Me.; and large shipments of
copper ore from Galveston to Perth Amboy, N. J.
On the Pacific coast the movement of lumber from Puget Sound
ports to San Francisco, Los Angeles, and San Diego is very large, as
is also the traffic in oil from Los Angeles and Port San Luis to San
Francisco, Portland, Seattle, and Tacoma, and the traffic in raw sugar
from the Hawaiian Islands to the Pacific coast ports and, via the
Panama Canal, to New York, Boston, and Philadelphia.
Mention might also be made of the large traffic in raw sugar and
other products between San Juan, P. R., and New Orleans.
Reference has been made only to the more important bulk com-
modities that form a large part of the immense tonnage movement
of the coasting trade of the United States. Mention should also be
made of the traffic in general merchandise, which forms the bulk of
the value of this trade, and to the transportation of passengers, which
is so important along many routes as to warrant the use of large,
32
GOVERNMENT AID TO MERCHANT SHIPPING.
swift steamers, such as the Harvard and the Yale, 21-knot turbine
steamers of 3,700 gross tons register, plying between San Francisco,
Los Angeles, and San Diego; the City of Detroit III, a 20-knot
paddle steamer of 6,061 gross tons, plying between Cleveland and
Detroit; the Tashmoo, a 20-knot paddle-wheel steamer, plying be-
tween Detroit and Port Huron; the Newport News, the Northland,
and the Southland, 20-knot boats, operating between Norfolk and
Washington; the City of Cleveland III, the Eastern States, and the
Western States, all 19-knot paddle-wheel steamers, operating between
Cleveland and Detroit; and the Commonwealth, a 19-knot paddle-
wheel steamer, plying between New York and Fall River.
The extent as well as the rapid development of coastwise shipping
is indicated in the following table,' which shows the actual and po-
tential tonnage engaged in the coasting trade at the beginning of
each five-year period from 1850 to 1910 and for each year from 1911
to 1915:
1850.
1855...
1860...
1865..
1870..
1875...
1880...
1885.
1890....
1895...
1900...
1905..
1910.
1911..
1912....
1913.
1914...
1915...
a On June 30.
Actual tonnage.b
Year.a
Total.
Potential
tonnage.c
Sail.
Steam.
1,899,555
1,418, 550
481,005
2,861, 565
2,615, 731
1,960, 491
655, 240
3.926, 211
2,752, 938
1,982, 297
770, 641
3,454, 093
4,294, 220
2,484, 962
969, 131
5,392, 355
2,677, 940
1,798, 418
879, 522
4,436,984
3,238, 390
2,266, 584
2,649, 353
1,509, 766
971, 806
1,058, 587
5, 182, 002
4,685, 527
2,896, 573
1,606, 578
1,289,995
5,476, 563
3, 391, 884
1,752, 241
1, 639, 643
6,671, 170
3, 705, 104
1,768, 900
1,936, 204
7,577, 512
4, 239, 569
1,949, 744
2, 289, 825
•
8,819, 219
5,391, 802
2,291, 539
3, 100, 263
11, 592, 328
6,593, 728
2,321, 207
4, 272, 521
15, 138, 770
6,640, 820
2, 230, 215
4,410, 605
15, 462, 030
6,652, 686
2, 177, 485
4, 475, 201
15, 603, 088
6,726, 340
2, 153, 144
4,573, 196
15, 872, 732
6, 718, 974
2, 111, 933
4,607, 041
15, 933, 056
6,384, 725
1,889, 674
4,495, 051
15,374, 827
Includes all enrolled vessels of 20 tons and over, including vessels engaged in cod and mackerel fisheries.
c Computed on theory that 1 ton of steam tonnage equals 3 tons of sail tonnage.
A comparison of the data contained in this table with those shown
in the table on over-seas tonnage on page 33 indicates that even in
the most flourishing period of American foreign shipping, the period
from 1850 to 1860, the coasting trade engaged a larger tonnage than
the over-seas trade and made a much more extensive use of steamers.
In fact, the steam tonnage employed in the coasting trade of the
United States was nearly three times as great as the steam tonnage
of the entire British merchant marine in 1850-481,005 tons as against
168,474 tons and more than 60 per cent greater in 1860-770,641 tons
as against 454,327 tons.
A striking fact brought out in the above table is the high propor-
tion of sail tonnage employed in the coasting trade. The sail ton-
nage in the merchant navies of the world has declined rapidly during
the past three or four decades, and this has been true in a marked
degree of the registered, or foreign-trade, tonnage of the United
¹ Annual Report of the Commissioner of Navigation, 1915, p. 186.
THE UNITED STATES.
33
States, but not of the enrolled, or coasting-trade, tonnage. This
phenomenon is to be accounted for in part by the increased use of
barges, the tonnage of which rose from 341,042 tons in 1890 to 992,168
tons in 1914, and by the tendency to use sailing ships for bulk cargoes.
There is no question but that the decline in sail tonnage in the coast-
ing trade would have been marked if barges had not been included
with sailing vessels. Nevertheless, it is surprising to note the per-
sistence with which real sailing vessels have continued in this trade.
Sailing ships have proved to be economical carriers of soft coal,
lumber, ice, phosphate rock, and other bulk commodities which are
moved long distances and in large volume.
Stress has been laid on the importance of the United States coast-
ing trade, chiefly to emphasize its value to American shipping. Too
often the extent of the coastwise commerce is overlooked or mini-
mized and little or no account is taken of the fact that the vessels
engaged in this trade are for the most part as efficient as vessels in
the over-seas trade of foreign countries; that many of the coasting
vessels of the United States are, in fact, strong ocean-going craft
that travel long distances on the open seas; and that many of them
can be used effectively in the trans-Atlantic trade, as has been demon-
strated since the outbreak of the present war in Europe.
While the coastwise shipping of the United States has been devel-
oping rapidly, the actual tonnage registered for the foreign trade
has on the whole declined. Nevertheless and this is a fact too often
ignored in discussions as to the strength of the American merchant
marine-the potential tonnage has increased steadily since 1880.
And in this connection it should be remembered that the strength of
a merchant marine is more accurately stated in terms of potential
tonnage than in actual tonnage, since the former takes account of the
greater efficiency of steam tonnage, which is commonly estimated as
being three times that of sail tonnage.
Statistics of the actual and potential tonnage registered for the
foreign trade at the beginning of each five-year period from 1850 to
1910 and for each year from 1911 to 1915 are given in the following
table:
1850...
1855..
1860.
1865...
1870...
1875..
1880.
1885.
1890..
1895..
•
1900.
1905.
1910.
1911.
1912..
Year."
Actual tonnage.
Total.
Potential
tonnage.b
Sail.
Steam.
1,585, 711
2, 535, 136
2,546, 237
1,602, 583
1,540, 769
2, 420, 091
2, 448, 941
44, 942
115, 045
97, 296
1,675, 595
2,765, 226
2,740), 829
1,516, 800
1,553, 327
1,504, 575
1, 324, 256
98,00S
1,798, 599
192, 544
1,901, 888
1,362, 138
191, 689
1,352, 810
1,937, 205
1,206, 206
146, 604
1,287,999
1,646, 018
1, 101, 593
186, 406
1,660, 811
946, 695
749, 065
197, 630
838, 187
1,341, 955
586, 142
252, 045
1,342, 277
826, 694
485, 352
341, 342
1,509, 378
954, 513
353, 333
601, 180
2,156, 873
791, 825
234, 848
5,56, 977
1,905, 779
872, 671
286, 941
585, 730
932, 101
2,044, 131
312, 395
619, 706
2, 171, 513
1,027, 776
356,628
671, 148
2,370, 072
1,076, 152
351, 278
724, 874
1,871, 543
2,525, 900
521, 697
1, 349, 846
4,571, 235
•
1913..
1914.
1915...
a Year ended June 30.
b Computed on theory that, 1 ton of steam tonnage equals 3 tons of sail tonnage.
41987°-16-3
34
GOVERNMENT AID TO MERCHANT SHIPPING.
For many years prior to the Civil War the merchant marine of the
United States was second only to that of Great Britain, and the bulk
of the foreign trade of this country as well as much of the trade of
other countries was carried in American bottoms. That was the
period of the wooden sailing ship, which could be built more cheaply
by the American shipbuilder than by foreign constructors, and which
could be handled more efficiently by American sailors than by foreign
sailors. The shipping industry was, moreover, one of the few im-
portant industries of the young nation, and it offered a profitable
field for the employment of American capital and labor. With the
advent of the iron steamship, the advantage of the American ship-
builder and shipowner was largely curtailed. The English builder
could secure iron plates for hull and boiler more cheaply than his
American rival, for the iron industry was developed much earlier in
England than in the United States. Moreover, the British ship-
owner was keen to take advantage of the opportunity offered by the
use of iron ships, while American shipowners were satisfied with the
advantages which their fast clipper ships then gave them. It is not
surprising, therefore, that as the superiority of iron ships came to be
appreciated English shipping forged ahead and American shipping
fell behind. This process had been under way, so far as over-seas
shipping is concerned, for some time before the beginning of the
Civil War.
The war merely accelerated the relative decline of American ship-
ping. Not only was a large amount of tonnage destroyed on the high
seas during the war, but a large amount (about 750,000 tons¹) was
transferred to foreign registry to avoid capture and destruction, and
after the close of the war this tonnage was never permitted to be
registered in the United States.
By as much as the over-seas shipping of the United States was
diminished by the war, that of foreign countries, particularly Great
Britain, was increased. The hold upon the carrying trade of the
world which Great Britain then secured has never been relinquished
and never seriously threatened.
The United States might have regained much of the ground lost
during the war, (a) if the law of February 10, 1866 (R. S., 4135),
prohibiting the return to American registry of ships that had held
American registers and had given them up for foreign registers dur-
ing the war, had not been passed; (b) if interest in the internal de-
velopment of the country had not been so absorbing; (c) if the
dominant protectionist theories had not been antagonistic to foreign
trade; (d) if American shipowners had not clung so tenaciously to the
clipper ships; (e) if American shipowners had not been restricted to
domestic yards for the construction of their ships; and (f) if Ameri-
can shipowners had been in a position to take advantage of the op-
portunities offered by the change of the commerce and the trade
routes of the world consequent upon the substitution of steam for
sail and, later, upon the opening of the Suez Canal.
To do more than enumerate the causes for the decline of the over-
seas shipping of the United States is not expedient in a report of
this character. Nevertheless it is necessary to bear these facts in mind
¹Annual Report of Commissioner of Navigation, 1915, pp. 214-215.
THE UNITED STATES,
35
in considering ways and means by which the over-seas shipping under
the American flag may be extended.
Within recent years conditions have changed greatly. Many of the
adverse factors enumerated above have been converted into positive
and favorable factors.
(a) As a result of the passage of the ship-registry act of August
18, 1914, the American shipowner is free to buy his ships in the
cheapest market and American registry is no longer denied to foreign-
built ships owned by American citizens. Between the date of this act
and May 12, 1916, 180 foreign-built ships, with a total gross register
tonnage of 617,183, were added to the over-sea shipping under the
United States flag.
(b) Interest in the internal development of the country is no
longer so absorbing as to preclude interest in over-seas trade, and
large amounts of American capital have been put into ships, practi-
cally all of which sailed under foreign flags until the passage of the
law of August 18, 1914. For example, the Standard Oil interests,
the United Fruit Co., the United States Steel Products Co., W. R.
Grace & Co., and other important American concerns had large
fleets of vessels under the flags of foreign nations.
(c) The country has thrown off the influence of certain phases of
the extreme protectionist system which were long and unduly empha-
sized by the leading exponents of that system and discouraged mari-
time enterprise. This point is well brought out in David A. Wells's
essay on the Decay of Our Ocean Mercantile Marine, Its Cause and
Cure, in which he quotes from the writings and speeches of Henry C.
Carey, Horace Greeley, William P. Frye, and other leading protec-
tionists. A system of protection so high as virtually to shut out im-
ports could hardly be promotive of much foreign shipping, for ships
require return as well as outbound cargoes to be run economically.
To-day the country is, on the whole, favorable to the development
and expansion of its foreign trade, which is coming to consist, on the
import side of the balance sheet, more and more of raw and partly
manufactured products and, on the export side, more largely of
finished manufactured products. American industry is now organ-
ized on a big-production basis, and the home market, great as it is,
is no longer able to absorb the whole production of many lines of
manufacture. Many of the large plants, it is claimed, can be run at
the greatest efficiency only when operated at maximum capacity, but
this brings about a production in excess of domestic requirements.
Moreover, the tendency is for exports of breadstuffs to decrease,
which means that larger exports of other products, mineral and
manufactured, are required to liquidate this country's indebtedness
to the rest of the world for supplies of coffee, tea, cocoa, raw silk,
jute, Egyptian cotton, hides, rubber, tin, antimony, nitrates, potash,
and other raw materials not produced in this country, as well as
for manufactured products, such as dyestuffs, that are more economi-
cally produced abroad, and to pay the interest on the investments
that other countries have made in the United States and to provide
the money expended by American travelers in Europe.
(d) American shipbuilders have long since given up the clipper
ship and are now showing as much enterprise as foreign shipbuilders
in the development and utilization of steamships. The expansion of
the American Navy and of the coasting trade has given American
•
36
GOVERNMENT AID TO MERCHANT SHIPPING.
shipyards much work to do, and has recently made possible the stand
ardization of ship construction, which English yards have practiced
for years, and which has enabled American shipyards along the
Great Lakes to produce great ore-carrying vessels as rapidly and as
cheaply as it is possible for them to be produced.
The price of ship plates is now somewhat lower in the United
States than in Great Britain, which is a reversal of former condi-
tions. Moreover, the steel industry of this country, which is now
highly organized and extensive, is in a position to render more effec-
tive assistance than formerly in the development of the shipbuilding
industry. This assistance should be particularly valuable in the con-
struction of the proposed standardized ship with a hull built of struc-
tural steel cut to the proper length at the mill and merely put to-
gether at the shipyard, in the same manner as the framework of a
skyscraper is raised. The extensive use of structural steel, resulting
in large-scale production, is essentially an American practice, and
the idea of a standardized ship built of structural steel is also of
American origin. It is clear, therefore, that if this new type of ship
should prove as successful as it gives promise of doing the American
shipbuilding industry would have for a time at least, and at a most
most auspicious time, a marked advantage.
(e) American shipping has now an opportunity such as that en-
joyed by Great Britain 50 years ago. The opportunity comes at a
time when American citizens owning foreign-built ships can ply them
under the American flag; when interest in foreign trade is widespread
and the necessity for foreign markets clearly recognized; and when
the profitableness of shipping under present conditions is alluring.
(f) At this time, too, certain new trade routes may be opened up
with marked advantage. For example, the west coast of South
America imports large quantities of coal, which have come largely
from Australia and Wales. Since the construction of efficient coal-
carrying railroads, such as the Norfolk & Western, the Chesapeake &
Ohio, the Virginian, and the Carolina, Clinchfield & Ohio, Virginia
steam coal of excellent quality can be delivered at low cost at the
Atlantic seaboard ports of Norfolk, Newport News, and Charleston,
where it can be transferred from car to vessel quickly, efficiently, and
at low cost. It is believed that increasingly large quantities of this
coal can be sold in Chile and Peru at lower cost than Australian or
Welsh coal. If this proves to be the case, the vessels carrying coal
from the United States can return with nitrates from Chile, copper
from American-owned mines and smelters in Chile and Peru, tin ore
from American-owned mines in Bolivia, and iron ore from American-
owned mines in Chile.
The development of exports of coal would cause reductions in re-
turn freights (a factor which goes far toward accounting for the
maritime supremacy of Great Britain) and an extension of American
shipping.
Emphasis has been laid on these facts and probabilities chiefly for
the purpose of showing that natural conditions and legislation now
favor the development of the American merchant marine to a greater
degree than they formerly impeded that development—a fact of
great importance in considering whether or not, and to what extent,
if any, the Government should offer direct financial assistance to
American shipping.
THE UNITED STATES.
37
INDIRECT AID.
Reservation of coasting trade.-All of the coasting trade of the
United States is reserved to ships operating under the flag of the
United States. Although the coasting trade was not expressly closed
to foreign ships until the passage of the act of March 1, 1817 (R. S.,
4347), nevertheless the much higher tonnage taxes levied under the
act of July 20, 1789, resulted in the exclusion of foreign shipping.
Attention has already been called to the extreme importance of
the coasting trade of the United States and to the manner in which
its reservation for American ships has promoted the development of
American shipping.
Exemption from import duties.-Prior to the passage of the
Panama Canal act of August 24, 1912, and of the ship-registry act of
August 18, 1914, only American-built vessels were admitted to
registry. The only exceptions to these rules were (a) vessels cap-
tured in war by citizens of the United States and lawfully con-
demned as prizes; (b) vessels wrecked on any of the coasts of the
United States, purchased by a citizen of this country, and repaired
in a shipyard of the United States, provided the cost of repairs was
at least three times the appraised salvage value of the vessel; and (c)
two foreign-built vessels of the American Line which were admitted
on special conditions under the mail subsidy act of March 3, 1891, and
certain other foreign-built vessels admitted by special acts of Con-
gress.
Section 5 of the Panama Canal act provided that foreign-built
seagoing vessels not more than 5 years old and certified by the Steam-
boat-Inspection Service as safe to carry dry and perishable cargo
might be admitted to American registry if owned wholly by citizens
of the United States. Vessels registered under this act could not,
however, engage in the coasting trade, but were to be eligible to the
benefits of the mail-subsidy act of March 3, 1891.
The ship-registry act of August 18, 1914, whose passage was due
largely to conditions arising after the outbreak of the present war
in Europe, removed the limitation as to age, and provided that the
President might exempt, by order, all foreign-built vessels registered
under this act from compliance during a term of years with certain
requirements of the navigation laws of the United States (those as
to survey, inspection, and measurement of the vessel and as to citizen-
ship of ship's officers).
The free importation of materials for the construction of ships
was not possible in any measure until the passage of the act of
June 6, 1872, which provided that "all lumber, timber, hemp, manila,
and iron and steel rods, bars, spikes, nails, and bolts, and copper and
composition metals which may be necessary for the construction and
equipment of ships built in the United States " for foreign trade and
trade between the Atlantic and Pacific coasts of the United States
might be imported free of duty.
The effectiveness of this act was greatly restricted by the fact
that the materials exempted from duty were of value only for the
building of wooden ships, which were already being superseded by
iron and steel ships, and by the fact that vessels built in whole or in
part of foreign materials imported free of duty could not engage
in the coasting trade for more than two months in the year.
38
GOVERNMENT AID TO MERCHANT SHIPPING.
The list of shipbuilding materials granted free admission was ex-
tended by section 5 of the act of February 8, 1875, which exempted
yellow sheathing metal and yellow metal boats of which the com-
ponent part of chief value was copper; by section 8 of the tariff act
of October 1, 1890, which exempted "iron and steel plates, tees,
angles, and beams;" and by sections 7 and 8 of the tariff act of
August 15, 1894, which extended the free list so as to include all
shipbuilding materials.
All tariff acts since that of August 15, 1894, have placed on the
free list all materials necessary for the construction, fitting out,
equipment, and repair of vessels built in domestic yards for the
foreign trade and for the domestic trade between Atlantic and
Pacific ports of the United States. This privilege extends to ships
built for foreign account.
Until the passage of the tariff act of August 5, 1909, domestic-
built ships constructed of foreign materials could not engage for
more than two months in any one year in the coasting trade, except
the trade between Atlantic and Pacific ports. The act of August 5,
1909, extended the period to six months, while section 5 of the
Panama Canal act of August 24, 1912, permitted these ships to en-
gage in the coasting trade during the entire year. This provision is
still in effect, the tariff act of October 3, 1913, making no change
in this respect.
DIRECT AID.
The only direct financial aid which the United States Govern-
ment has granted its merchant shipping has been in the form of
postal subventions to specified lines operating on specified routes in
the foreign trade. At no time has this country paid a general bounty
on the construction or operation of ships similar to the bounties
paid in France, Italy, Spain, and certain other countries.
The policy of granting financial aid to merchant shipping may
be said to have been instituted by the law of March 3, 1845, which
authorized the Postmaster General to contract with American ship-
owners for periods of from 4 to 10 years for the transportation of
mails between (a) ports of the United States and any foreign ports
not less than 3,000 miles distant; (b) to any of the West India
Islands or islands in the Gulf of Mexico; and (c) between ports
of the United States along the coast. The subventions consisted
of a liberal payment per letter and packet and not of a mileage or
route payment. The ships were to be of American construction and
steamships were to be preferred over sailing vessels.
The object of this law was to assist American ships in such a way
as to meet the competition of the Cunard Line vessels, which were
heavily subsidized by England.
In 1847 a five-year contract for services between New York and
Bremen and New York and Havre was entered into with the Ocean
Steam Navigation Co. This contract provided a grant of $100,000
per year for every ship making a round voyage between New York
and Bremen, via Cowes, once in two months and a grant of $75,000
a year for every ship operating between New York and Havre, via
Cowes. The contract required the company to build within one year
four first-class steamships which should have engines of at least 1,000
THE UNITED STATES.
39
horsepower and a tonnage of at least 1,400 tons, and should be ca-
pable of making greater speed than the boats of the Cunard Line.
Although service on the lines to Bremen and Havre was started
on June 1, 1847, regular sailings were not instituted until 1851, and
the subvention payments were paid on a voyage instead of a yearly
basis. In 1852 the contract was extended to 1857 and Southampton
was substituted for Cowes as a British port of call. With the aban-
donment of the policy of mail subventions in 1858 the New York-
Bremen service was discontinued, but the New York-Havre line con-
tinued operations until 1861, when its steamers were chartered by the
Government for naval purposes.
The most important contract entered into at this period was with
E. K. Collins and provided for a semimonthly service between New
York and Liverpool during the eight open months of the year and
a monthly service during the four winter months. Five steamers,
each of not less than 2,000 tons and having engines of 1,000 horse-
power, were to be used in this service and the compensation was to
be $19,250 for 20 round voyages, or $385,000 per year.
The service on this line was begun in 1850 and was highly success-
ful so far as the transportation of mails and passengers was con-
cerned. The boats of this line made the run between New York and
Liverpool in one day less than the Cunard ships and secured a large
part of the passenger traffic. On the other hand, the frequency of
service required in the contract prevented these vessels from staying
long enough in port to secure a sufficient amount of cargo to help pay
the cost of operation, which was high on account of the great speed
maintained. Moreover, the Cunard Line reduced ocean freights
nearly 100 per cent.
The Government stood behind Collins for a while. In 1852, when
Great Britain increased the Cunard subvention to £173,340 ($843,559)
for 52 round trips a year, the United States increased the Collins Line
subsidy to $853,000 for only 26 voyages.
The Collins Line was, however, doomed to failure. In September,
1854, it lost one of its four ships; in 1856 Congress reduced the sub-
sidy by cutting off the extra allowance granted in 1852, and in 1856
another of its ships was lost at sea; in 1858 the subsidy was entirely
withdrawn, the only financial aid being payment for actual mails
carried; and in January, 1859, the line made its final voyage.
Three other contracts of importance were entered into about 1847.
One, with A. G. Sloo, provided for a semimonthly service between New
York and the Isthmus of Panama, with calls at Charleston, if practi-
cable, and at Savannah. The contract called for the operation of
five copper-sheathed steamers of at least 1,500 tons register and pro-
pelled by direct-acting engines, and provided for an annual subven-
tion of $290,000.
Another contract was for a monthly service between Astoria, Oreg.,
and the Isthmus of Panama, where connection was to be made with
the Sloo Line operating to New York. This contract provided for
calls at San Diego, Monterey, and San Francisco, and required that
three steamers, two of at least 1,000 tons each, should be employed in
this service. The subvention was $199,000 per year. The contract was
assigned to the Pacific Mail Steamship Co., which had recently been
organized.
40
GOVERNMENT AID TO MERCHANT SHIPPING.
Service on this line was instituted in October, 1848, and operations
were highly successful, due largely to the rush to the California gold
fields. Under a supplementary contract entered into in 1851 the
service was put on a semimonthly basis and the annual subvention
increased to $348,250.
The other mail contract was entered into with M. C. Mordecai, of
Charleston, and provided for a monthly service between Charleston
and Habana, the compensation amounting to $45,000 per annum.
The total expenditures for subventions in the first era of direct
financial aid to American shipping are reported by Meeker to have
been as follows:1
Line.
Period. Amount.
Line.
Period. Amount.
New York-Bremen.
New York-Havre..
New York-Liverpool..
New York-Panama.
1850-1858
1848-1858 2,900,000
1847-1857 $2,000, 000
1852-1857
750,000
4,500,000
Astoria-San Francisco-Pan-
ama..
Charleston-Havana..
1848-1858 $3,750,000
1848-1858 500,000
Total..
14,400,000,
The second era of American mail subventions runs from 1864 to
1877. It was instituted by an act of May 28, 1864, which provided
for an annual subsidy of $250,000 for the establishment of a monthly
mail steamship service between Philadelphia and Rio de Janeiro.
The United States was to pay $150,000 and Brazil $100,000. The
contract called for the operation of first-class American-built
steamers of at least 2,000 tons, the same to be constructed under the
supervision of naval constructors and to be subject to requisition in
times of war. This line continued only from 1865 to 1876.
In 1867 the Pacific Mail Steamship Co. began the operation of a
monthly service between San Francisco and ports in China and
Japan via Honolulu, under a 10-year contract approved by law of
February 17, 1865. The contract provided for an annual subvention
of $500,000 and called for the operation of ships of not less than
3,000 tons, built in American yards under the supervision of the
naval authorities. The company was soon released from its obliga-
tion to call at Honolulu, although the subvention was not reduced, and
a new contract calling for the payment of $75,000 annually was con-
cluded with the California, Oregon & Mexican Line for the opera-
tion of the Hawaiian service.
In 1872 the Pacific Mail Steamship Co. proposed the establish-
ment of another monthly mail-steamship line to China and Japan for
an additional subvention of $500,000 per year. After much debate
Congress adopted the proposal and a contract to that effect was
entered into. This contract, however, was abrogated by act of March
3, 1875, after it was discovered that the law had been passed as a
result of corruption and the company had failed to carry out its
part of the agreement.
The original contract of 1867 remained in force for the stipulated
period of 10 years, but was not renewed. Under this contract and
under the short-lived contract of 1872 the Pacific Mail received in
subsidies a total of $4,583,333.
1 Meeker: History of Shipping Subsidies, p. 156.
THE UNITED STATES.
41
The net result of Government aid to shipping during this period
was to establish an American line operating American-built vessels
in the trans-Pacific trade, a line that continued its operations with-
out subventions from 1878 to 1915. The line to Brazil, as already
stated, discontinued operations after the subvention contract ex-
pired. Other subventioned lines were proposed in 1872, one to
Australia and another from New Orleans to Cuba, but neither se-
cured the approval of Congress.
During this period, however, the policy of granting mail subven-
tions received a death blow. The disclosures as to the maintenance of
a corrupt lobby to secure congressional approval of the second
Pacific Mail contract left such an unfavorable impression upon the
popular mind that no serious attempt was made to institute subven-
tion payments for at least 10 years.
The third period of subventions was begun in 1891 by the postal aid
act of March 3 of that year, which is still in force. This act pro-
vides that the Postmaster General may, after inviting bids, enter
into contracts for terms of from 5 to 10 years with American citizens
for carrying mails on American steamships between the United
States and foreign countries, with the exception of Canada, the sev-
eral services "to be equitably distributed among the Atlantic, Mexi-
can Gulf, and Pacific ports." The act specifies four classes of con-
tracts, which provide compensation that varies with the character
of construction, tonnage, and speed of vessel, as follows:
Steamships.
Class I...
Class II...
Class III..
Class IV.
Classes.
Construction.
Mini-
mum
Minimum
gross ton-
Maximum
compensa-
tion per
mile.
speed.
nage.
Knots.
Tons.
Iron or steel.
20
8,000
$4.00
..do...
16
5,000
2.00
..do...
14
2,500
1.00
Iron, steel, or wood..
12
1,500
.663
All vessels except those of Class IV must be constructed under the
supervision of the naval authorities and must be built for use as
auxiliary cruisers in time of war. Vessels of all classes must, more-
over, be built in American yards. An exception was allowed in
the case of the American Line, which secured a Class I contract for a
service to England and which was granted, by act of May 10, 1892,
American registry for two foreign-built vessels on condition that
two others of equal size and speed should be built in American yards.
Not only must the ships be built in American yards and owned
by American citizens, but they must be officered by Americans and
manned by crews of whom Americans shall constitute at least one-
fourth during the first two years, one-third during the next three
years, and one-half during the remainder of the contract. It is inter-
esting to note that the steamers operated under the mail subsidy act
of 1891 are the only American vessels that are required to carry
American crews.
The following table shows the amounts actually expended annually
for each contract mail service subsidized under the act of March 3,
1891, in the period from 1892 to 1915:
42
GOVERNMENT AID TO MERCHANT SHIPPING.
Oceanic Steam-
ship Co.
New York & Cuhan
Mail Steamship
Co.
Red D Line.
Ameri-
can Line,
Ameri-
can Mail
Steam-
ship Co.,
Boston
Year ending June 30–
New
York to San
South- Francisco
ampton. to
New
San
Francisco
to
York to
New
York to
New
York to
New
York to
and
Phila-
Puerto
Mara-
Vera
delphia
Sydney,
Australia.
Cruz,
Habana,
Cabello,
caibo,
to
Tahiti.
Cuba.
Vene-
Vene-
Mexico.
Jamaica.
zeula.
zuela.
1892..
1893..
$55,000
56,000
$27,075
1894..
$85,068
$188, 720
$49, 455
56,000
81, 297
1895..
130, 104
220, 258
73, 476
1896..
55,000
79,030
130, 104
512, 028
73,476
1897..
56,000
79,030
130, 104
757, 680
73, 476
79, 030
135,000
1898..
130, 104
580, 800
136,000
73,476
81,288
1899..
102, 582
485, 674
57,933
136,000
63,224
1900..
87,570
647, 278
59, 346
136,000
42, 902
1901..
130, 104
$56, 907
528, 538
73, 476
133, 272
54, 192
121, 255
1902.
127, 602
662, 184
73, 476
1903.
283, 203
56, 450
$37,908
117, 490
130, 104
73,476
660, 672
53, 528
283, 203
1904..
42, 120
$15, 280
122, 109
130, 104
690, 483
73,476
283,203
63, 315
1905.
42, 120
39, 049
110, 415
132, 606
662, 688
73, 476
1906...
299, 862
60, 880
42, 445
42, 120
92,748
130, 629
762, 638
71,878
249, 885
63,315
44, 143
116, 986
1907..
42, 180
130, 884
1938..
691, 224 a 133, 272
72,398
63,315
45,841
114, 775
25,308
130, 884
737, 016
71,032
63,315
1909..
37,962
44, 143
130, 884
106,337
71, 032
737,536
58,445
1910...
42, 180
44, 143
105, 667
130,884
676, 480
71, 032
42, 993
1911.
46,398
44, 143
133, 401
81, 989
71,032
646, 472
63, 173
1912.
42, 180
39, 049
85,070
130, 884
71, 032
570, 672
63, 149
44, 143
1913..
b 21,090
150, 884
77,085
1914..
626, 650❘
72,398
c
201, 916
63, 210
44, 451
80, 456
124, 288
673,998
d 23, 222
201, 916
62, 972
43,300
1915..
97,566
62,283
714, 178
201, 916
62,972
34,640
69, 690
€ 18, 269
65, 394
45, 032
•Discontinued Oct. 28, 1913.
a Discontinued Mar., 1907.
b Discontinued Jan. 1, 1912.
c Resumed July 1, 1912.
d Discontinued Oct. 31, 1912.
American ships holding contracts under the law of March 3, 1891,
are not the only ships that receive compensation for the transporta-
tion of mails. Large sums are paid annually to American ships
operating on a noncontract basis and to a number of foreign ships.
The following table shows the amounts received by the more im-
portant American noncontract and foreign lines in the years 1911
to 1914:
Registry and company.
UNITED STATES REGISTRY.
Pacific Mail Steamship Co.....
Great Northern Steamship Co..
Panama R. R. Steamship Co..
Clyde Steamship Co.
FOREIGN REGISTRY.
North German Lloyd.....
Cunard Steamship Co...
White Star Line………
Compagnie Générale Trans-
atlantique.
Hamburg-American Line……….
Do...
Toyo Kisen Kaisha..
Service.
San Francisco to China, Japan,
and the Philippines.
Seattle to Hongkong, via Japan
New York to Panama....
New York to Santo Domingo
and Turks Island.
1914
1913
1912
1911
11, 750
$62,259
$77, 787
$88, 214
$60, 150
8,870
198, 395
8, 638
7,565
9, 644
188, 021
158, 663
23,957
162, 475
19,954
16,871
New York to Bremen
New York to Liverpool..
363, 790
320, 877
317,099
227, 495
.do.
>
206, 042
269,573
325,990
263, 985
New York to Havre......
204, 725
219, 237
221,853
152, 758
186, 771
167,023
141, 417
96, 181
Seattle to Hongkong, via Japan
San Francisco to Australasia.
New York to Hamburg.
New York to West Indies, etc..
San Francisco to Hongkong,
via Japan.
62,817
57,092
42, 703
21,680
13, 183
29,765
20, 654
19,736
30, 996
25, 653
15, 520
18,673
12,668
13, 653
16,081
9,318
20, 019
16, 189
United Fruit Co..
Do...
Do..
South America.
New York to Central America.
Boston to Costa Rica, etc..
New Orleans to Central Amer-
ica.
Pacific Steam Navigation Co... Panama to Colombia, Peru, etc.
New York to West Indies and
Seattle to Hongkong, etc..
Tacoma to Hongkong, via
Japan.
11, 186
6,821
5,670
8,056
7,715
12, 739
8,482
38,009
38, 310
34,037
•
30, 075
55, 691
45,853
16,373
2,629
3,386
3,990
3,085
42,640
2,007
36,844
31,835
23,344
18, 016
13,802
Nippon Yusen Kaisha..
Union Steamship Co. of New
Zealand.
Blue Funnel Line.
Osaka Shosen Kaisha.
Lamport & Holt Line...
THE UNITED STATES.
43
The act of March 3, 1891, has not had the results expected. Its
sponsors confidently stated that one effect of the law would be
the restoration of the prestige of American shipping in the trans-
Atlantic trade, but this has not proved to be the case.
Strong efforts have been made to extend the system of Govern-
ment aid to shipping, but with no success. Reference might be made
to the Hanna-Payne bill, introduced in the Senate on December
19, 1898; the Frye bill introduced in the Senate on February 28, 1899;
the Frye bill of February 26, 1900; the Payne bill of March 31,
1900; the Frye bill of December, 1901; the majority report and bill
of the Merchant Marine Commission, submitted January 4, 1905; the
Gallinger bills of December 4, 1905, December 4, 1907, and February
23, 1910.
For a concise account of the action taken by Congress on the prin-
cipal subsidy bills introduced since 1891 the reader is referred to
pages 86 to 96 of a Manual of Ship Subsidies, by Edwin M. Bacon,¹
and to pages 132 to 138 of American Shipping, by Hans Keiler.2
The subventions granted under the act of March 3, 1891, have
always been regarded as liberal, since they were far in excess of the
amounts which the Government would have paid to the same lines
for the transportation of mails on a noncontract weight basis instead
of contract mileage basis. In this connection it should be stated that
noncontract steamers flying the American flag are paid at the rate
of 80 cents a pound for letters and post cards and 8 cents a pound
for other articles, while foreign steamers receive, under the Universal
Postal Union rates, 4 francs per kilo (about 35 cents per pound) for
letters and post cards and 50 centimes per kilo (about 4.5 cents per
pound) for other articles. In recent years the tendency has been to
make the fullest possible use of the contract mail steamers and to
hold as much mail as possible, particularly heavy packets, for these
ships. The result has been that the excess of the subvention over
the amount the Government would have had to pay on the weight
basis has been gradually reduced until in the fiscal year 1914 the
cost of the service was less on the contract basis than it would have
been on a weight basis. In other words, the element of subvention
had been extracted from the mail contracts and the only advantage
to be derived therefrom was the assurance of a large fixed payment
yearly.
In referring to this subject the Second Assistant Postmaster Gen-
eral, in his annual report for 1915, page 25, made the following
statement:
The total cost of the contract service was $1,096,209.93, which is $90,709.11
less than the amount that would have been allowable at the present rates to the
conveying steamers if they had not been under contract and had conveyed the
same mails. In considering the cost of the contract service, it should be borne
in mind, however, that during the year foreign closed mails, amounting to 135,-
093,083 grams (297,880 pounds) of letters and post cards, and 429,717,543 grams
(947,527 pounds) of other articles, the conveyance of which in the ordinary
course would have cost the department at the rate of 4 francs a kilo for letters
and post cards and 50 centimes a kilo for other articles, a sum amounting to
$145,759.60, were dispatched by the contract steamers without additional cost
to the department. The net result, therefore, is that the contract service cost
$236,468.71 less than if the conveying steamers had not been under contract
1 Chicago, 1911.
• Jena (Gustav Fischer), 1913.
44
GOVERNMENT AID TO MERCHANT SHIPPING.
but had been paid on the basis of the weights of the mails at the rates regularly
allowed to steamers of United States registry not under contract. In con-
sidering this subject it should be borne in mind that the fiscal year of 1914
was the first year in the more than 20 years of service under the act of 1891
that the cost of the contract service was less than the conveying steamers
would have received on the weight basis for conveying the same amount of mail.
The economy effected by utilizing the contract steamers to the fullest extent
possible can be readily appreciated when it is understood that all mail not
dispatched by the contract steamers must be dispatched by noncontract
steamers, and its conveyance paid for on the weight basis, while the increased
weight of the mail dispatched by the contract steamers does not increase their
pay, which is on the mileage basis.
Chapter II. THE BRITISH EMPIRE.
GREAT BRITAIN.
The primacy of Great Britain in the merchant shipping of the
world is too well known to require comment. The merchant marine
of Great Britain has ranked first among the merchant navies of the
world for several centuries, and only once during the past 100 years
has its supremacy been threatened. In 1850 the total tonnage under
the British flag exceeded that of the United States, including the
lake and river boats, by only three-quarters of a million tons, and
in 1861 by only a quarter of a million tons. In recent years the mer-
chant shipping of Germany has grown somewhat more rapidly than
that of Great Britain, but its extent at the outbreak of the present
war in Europe was not more than one-fourth that under the British
flag. The development of the British merchant marine since 1850 is
indicated in the following table, which shows the actual and potential
net tonnage registered in the United Kingdom, including the Chan-
nel Islands and the Isle of Man, at the beginning of each five-year
period from 1850 to 1910 and for each year from 1911 to 1913:
1850.
1855..
Year.a
1860..
1865.
1870...
1875...
1880.
1885..
1890...
1895..
1900...
1905..
1910..
1911.
1912..
1913...
a On Dec. 31.
Includes ships of 15 ton and over.
Net tonnage.b
Total.
Sail.
Steam.
Potential
net
tonnage.c
3,565, 133
3,396, 659
168, 474
3,902, 081
3,990, 170
3, 701, 214
288, 956
4,568, 082
4,658, 687
4,204, 360
454, 327
5,567, 341
5, 408, 451
4,706, 752
701, 699
6,811, 840
5,690, 789
4,577, 855
1, 112, 934
7,916, 657
6, 152, 467
6, 574, 513
4, 206, 897
1,945, 570
10,043, 607
3,851, 045
2,723, 468
12, 021, 449
7,430, 045
3,456, 562
3,973, 483
15,377, 011
7,978, 538
2,936, 021
9, 988, 450
2,866, 895
5,042, 517
6, 121, 555
9, 304, 108
2,096, 498
10, 735, 582
11,556, 663
11,698, 508
11, 894, 791
1,670, 766
1, 113, 944
7, 207, 610
9, 064, 816
18, 063, 572
21, 231, 560
23, 719, 328
28,865, 214
10, 442, 719
32, 442, 101
980, 997
902, 718
10,717, 511
33, 133, 530
|
10, 992, 073
33, 878, 937
12, 119, 891
846, 504
11,273, 387
34, 666, 665
c Computed on theory that 1 ton of steam onnage equals 3 tons of sail tonne.
The extensive development of the merchant marine of Great
Britain may be accounted for in various ways. In all cases, how-
ever, it is necessary to go back several centuries in the history of the
world, at least to the beginning of the colonization period, when
Spain and Portugal by reason of their early discoveries and settle-
ments in America were most favorably situated among the nations
of Europe. The trade and shipping of Spain prospered remarkably
as long as the precious metals of Mexico and Peru were to be found
in great abundance, but the pursuance by Spain of a false economic
45
46
GOVERNMENT AID TO MERCHANT SHIPPING.
policy whereby that country sought to monopolize all of the trade
of her rich colonies, proved disastrous, since it did not provide for
the development of manufactures in Spain. The gold and silver of
Mexico and Peru were paid directly to merchants in Spain, but
much ultimately went to the manufacturers of Great Britain, who
supplied the bulk of the wares sent out in Spanish ships to the
Spanish colonies. This policy, while disastrous to Spain, proved
a great stimulus to the development of the domestic industries of
Great Britain.
This was, moreover, the period of the Elizabethan seamen, when
Frobisher, Drake, and Hawkins made great voyages of exploration
and discovery as well as piratical raids upon the gold-laden ships
of Spain, and not only brought home to England rich booty but
stimulated interest in lands and trade across the seas, which led
to the great colonial enterprises of that country.
The opportunities for British enterprise were made even better by
the destruction of the Spanish Armada in 1588. This was almost a
death blow to Spanish shipping, for it should be remembered that
until comparatively recent years the navies of the world were com-
posed mainly of merchant ships.
The development of the American colonies and the monopolization
of trade between Great Britain and the American and other colonies
under the régime of the navigation laws led to a still greater devel-
opment of the British merchant marine, which was accelerated by
the acquisition of Canada and India in 1763 as a result of the Seven
Years' War. The acquisition of East India brought about an im-
portant addition to British trade and shipping.
From these facts it is safe to deduce that three of the main causes
for the development of the British merchant marine were (1) the
early development of British industry, (2) the acquisition of exten
sive colonial possessions, and (3) the monopolization of the trade
with these colonies. These three factors gave the British merchant
marine such a great advantage over the shipping of other countries
that for the last three centuries it has been subjected to keen compe-
tition from only two countries, namely, the Netherlands in the latter
part of the seventeenth century and the United States in the first
half of the nineteenth century.
During the first half of the nineteenth century, or until the repeal
of the old navigation laws, British merchant shipping was at a dis-
advantage as compared with that of the United States, chiefly by
reason of the fact that ships could be built more cheaply in the latter
country because of the greater supply of the necessary raw materials.
The soft lumber found in great abundance in the States proved to
be quite as serviceable as the hardwood used by British builders and,
in addition, was cheaper. The building of sailing ships became one
of the important industries in America, and great skill was attained
in their construction, the American clipper ship being the fastest and
most efficient sailing vessel on the seas at that period.
The rivalry of the United States did not, however, continue long.
for about the middle of the nineteenth century steamships of iron and
steel construction were introduced. The iron industry of England
had then been extensively developed for a number of years as a result
of the fact that the processes of iron and steel manufacture had been
perfected by English inventors. Moreover, the application of steam
THE BRITISH EMPIRE.
47
to industry was further advanced in England than in the United
States. England had, therefore, in the manufacture of iron steam-
ships an advantage similar to that which the United States had had
in the manufacture of wooden sailing vessels, and it is not surprising
that with the increasing use of the former the merchant shipping of
Great Britain was subjected to less and less competition from that of
the United States.
Other reasons help to account for the decline of American shipping.
During the Civil War many American ships were destroyed, while
many were transferred to foreign registry in order to avoid capture
by the Confederate cruisers, and were not allowed to return to
American registry after the war. The opening up of the West, the
building of railroads, the development of the manufacturing in-
dustries, and other domestic enterprises proved more absorbing and
offered richer rewards than ocean shipping, which had been one of
the chief industries until the outbreak of the Civil War.
Another cause for the development of British shipping since 1850
is advanced by Kirkaldy, in his recent book on British Shipping,
in which he refers to the repeal of the navigation laws in 1849 as an
important factor in the growth of British shipping in the last 60
years, and, says.¹
Some British shipowners looked on this as "the last straw," but the possi-
bility of being driven off the sea, or perhaps it may be the stimulus given by
the loss of protection, brought out the best fighting qualities of the British
owner.
The causes of the growth of British merchant shipping have been
referred to in some detail because of the fact that it has been ascribed
by many writers to the policy of Government aid and in particular
to the policy of granting postal subventions beginning with the estab-
lishment of the Cunard Steamship Line in the trans-Atlantic trade
in 1839. From the following description of the shipping policy of
Great Britain with respect to financial aid it will be seen that that
Government has at no time granted a general bounty or subsidy. Its
financial support has, on the other hand, with one or two important
exceptions, been limited to subventions for specified services, as, for
example, the maintenance of fast steamers for the regular convey-
ance of mails and for use as auxiliary cruisers in time of war.
The great bulk, 95 per cent or more, of the total tonnage under
the British flag has long consisted of ships that have received no
subsidy but owe their success and earning power to the fact that
England has been able to build steamships more cheaply than any
other nation, and because the great trade of England in all parts of
the world provides them with full cargoes for most of their voyages.
British enterprise is shown clearly by the fact that British ship-
yards have long since standardized the manufacture of cargo vessels,
just as the American yards on the Great Lakes have done with equal
success with respect to ore and coal carrying ships. Standardiza-
tion has meant lower cost of construction, which, in turn, has meant
lower interest, insurance, and depreciation charges, and therefore
lower cost of transportation.
The possession by England of the bulk of the world's over-seas
trade not only gave British ships ample cargoes but also made it pos-
1 Kirkaldy: British Shipping, Its History, Organization, and Importance, p. 26.
48
GOVERNMENT AID TO MERCHANT SHIPPING.
1
sible for English shipowners to lay out the trade routes so as to in-
sure fullest possible cargoes for their ships at all stages of their
voyages. For example, steamers leave London with general cargo
for Brazil; take on a cargo of coffee at Santos for delivery at New
Orleans; take on a cargo of compressed cotton at New Orleans, navai
stores at Pensacola or Savannah, and bunker coal at Norfolk; and
return to England. Under such an arrangement these steamers have
full cargoes on each leg of the triangular course, and work for
British industry on two legs of the voyage.
Other illustrations of the manner in which the arrangement of
trade routes works to the advantage of British shipping are given
by Kirkaldy in his recent book on British Shipping. On pages 348
to 372 of this book Kirkaldy gives details as to 24 trading voyages
which took place between 1896 and 1913.
On one of these voyages the ship took a general cargo from Lon-
don to Fremantle; then loaded Karri wood blocks, for London pav-
ing, at Albany; went to Newcastle, New South Wales, for coal;
loaded some frozen meat there; completed loading at Sydney with
meat, wheat, and wool. Part of the meat was for Havre, France,
and the remainder for London. En route the vessel called at
Wellington, St. Vincent, and Teneriffe for bunker coal.
On another voyage a ship started from London with a general
cargo for Western Australia; loaded Karri wood blocks at Albany
for London; coaled at Newcastle, New South Wales, while en route
from Sydney to Brisbane; loaded frozen meat at Sydney and Bris-
bane; and called at the River Plate for live oxen and sheep.
Another voyage referred to by Kirkaldy embraced the following
itinerary and cargo. This steamer had a new cylinder fitted at
Glasgow and took in some bar, sheet, and pig iron and 2,400 tons of
bunker coal. She then steamed to Liverpool, loaded a large quantity
of iron and some general cargo. The loading was finished at Avon-
mouth, where she took on about 100 tons of cocoa and 1,200 tons of
galvanized iron. Of the whole cargo, two-thirds consisted of iron in
various forms. The usual Australian ports were visited, and, in
addition, Hobart. A full cargo of wool was loaded and the home
voyage was by way of the Suez Canal. The duration of this
was from December 9 to April 13.
voyage
The maintenance by England of coaling stations in all parts of
the world and her possession of the superior coal of Wales, which
lies close to the seaboard and can be delivered with little or no rail
freight, insures return cargoes for the ships bringing raw materials
to England.
Kirkaldy in his book on British Shipping (p. 456) lays great em-
phasis upon this factor. He says:
In a word, coal exports have been of very great advantage in building up the
world commerce of Great Britain. As has already been pointed out in some
detail, the fact that there is a cargo of coal to carry outward, even though
carried at a comparatively low rate of freight, has been a great factor in reduc-
ing homeward freights. Indeed coal, since the era of the steamship began, has
been one of the great factors assisting the phenomenal growth of British
shipping.
Speaking further on this point, Kirkaldy says:
Then, again, it has been the British ship owners who in the first instance made
use of the steamship for long ocean voyages. A great export trade in coal was
developed by this country long before other countries were ready with steam-
:
THE BRITISH EMPIRE.
49
ships to enter into competition for the carrying trade of the world. Thus it has
come to pass that English coal has been procurable even in the most distant
markets. The conditions of the freight market, too, have been by no means a
slight factor in bringing about this result. The industries of the United King-
dom require large quantities of bulky raw materials, and the large town popu-
lation requires more foodstuffs than the country population has been able to
produce. It is true that large quantities of manufactured and semimanufac-
tured goods have been exported, but the raw materials and foodstuffs imported
have necessitated the employment of a far greater tonnage capacity than has
ever been required for exported manufactures.
INDIRECT AID.
Reservation of coasting trade. Since the repeal of one of the old
navigation laws by the law of March 23, 1854, the coasting trade of
the United Kingdom has been open to the ships of every nation that
grants English ships a corresponding privilege. The purpose of
throwing open the coasting trade is not definitely known, but one
writer, René Mauzaize, suggests that this was done "not as a mat-
ter of principle but simply for the reason that domestic industries,
that of coal in particular, were complaining of poor service on the
part of British shipowners." Nevertheless, it is reported that 91
per cent or more of the coasting trade of the British Isles is carried
in ships of British registry.
Under the old navigation laws the trade between England and
her colonies and also the coasting trade of the colonies themselves
were reserved to ships flying the British flag, but this reservation
was removed in the period from 1849 to 1854, when the last rem-
nants of the navigation laws were wiped out.
It is interesting to note that in recent years the proposal has been
made, and favorably received, that some such preferential system be
instituted again, with the view not only of assisting British shipping
but also of using this policy as a means to securing admission for
British ships in the coasting trade of other nations.
In the course of his testimony before the Select Committee on
Steamships Subsidies in 1902, Sir Robert Giffen, who for many years
had been the head of the Statistical and Commercial Department of
the British Board of Trade, suggested that the coasting trade of the
British Empire should be reserved to British ships in either of the
following ways: (1) By excluding foreign ships, especially those
receiving subsidies, from the coasting trade of the different parts
of the British Empire and from the trade between the United King-
dom and Australia, or between the United Kingdom and India,
or between Australia and India, and so on; or (2) by admit-
ting foreign ships to the imperial coasting trade only upon condi-
tion that they comply with the same rules as to construction, equip-
ment, and inspection as English ships and pay for the privilege of
engaging in this trade an amount equal to or greater than any sub-
sidy they receive.
In its report the select committee made the following reference to
the above suggestions: 2
Your committee think that the occasion has come when the question of the
qualified reservation of British imperial coasting trade on the lines above indi-
cated should be considered by His Majesty's Government, with a view to reserv-
1 L'Art Allemand d'avoir Une Marine Marchande aux Dépens d'Autrui (Faris, 1908),
p. 125.
2 Report of Dec. 3, 1902, p. xxii.
41987°—-16———4
50
GOVERNMENT AID TO MERCHANT SHIPPING.
ing the British and colonial coastwise trades and the imperial "coasting" trade
within the British Empire to British and colonial ships and to vessels of those
nations who throw open their coasting trade to British and colonial ships.
The committee also recommended, "with a view to the fair com-
petition of British shipowners with their foreign rivals," that "means
should be taken to obtain the removal of foreign laws and regulations
which exclude the British shipowners from the trades appropriated
by various foreign powers to their own shipping as coasting trade,
and that, if need be, regulations for the admission of foreign vessels
to the British and colonial trade of this empire should be used with
the object of securing reciprocal advantages for British shipowners
abroad."
To what extent the recommendations of this committee have been
acted upon is not fully known. The coasting trade of the United
Kingdom itself has not been closed to ships of other nations, nor has
the trade between the United Kingdom and any of its colonies and
possessions. On the other hand, Canada, Australia, and New Zea-
land have restricted their coasting trade to ships flying the British
flag, and these and other British colonies have, mainly since 1903,
granted preferential treatment in the imposition of import duties on
goods of British production or manufacture.
Canada instituted the policy of preferential duties on September
24, 1897, and has extended its application so that the preference now
extends to nearly all the products and manufactures of all the parts
of the British Empire except the Commonwealth of Australia. This
policy was introduced in the Union of South Africa on August 15,
1903, and extends to the products of Australia, Canada, and New
Zealand as well as those of the United Kingdom. This policy was
instituted in New Zealand on November 16, 1903, and in Australia on
August 8, 1907.
The preferences granted by Australia extend only to the products
and manufactures of the United Kingdom and the British South
Africa Union, and to the former, with few exceptions, only when the
goods are shipped in the United Kingdom to Australia direct and
not transshipped.
Exemption from import duties. Since the passage of the law of
1849 foreign-built ships have been granted the privilege of British
registry and have been admitted free of duty. Likewise all mate-
rials for the construction, repair, or equipment of vessels have,
under the free-trade policy of Great Britain, been granted free
admission.
Since the advent of the steamship Great Britain has been steam-
ship builder for the world. Until comparatively recent years steam-
ships could be built more cheaply in Great Britain than in any other
country, and it is not surprising, therefore, that much of the world's
merchant tonnage is of British production. Building ships for the
world at large has enabled British shipyards to produce on such a
large scale as to warrant specialization and standardization with
the attendant lowering of costs, which has benefited British ship-
ping interests to a larger degree than those of any other country.
Preferential railway rates.-So far as can be ascertained, the rail-
ways of Great Britain, all of which are privately owned, grant no
preferential rates on goods for export. On the other hand, the rates
THE BRITISH EMPIRE.
51
on certain commodities are said to be so high as to restrict the ex-
portation of these goods.
Loans to shipowners.-The only instance of a Government loan to
a shipping company is that made to the Cunard Steamship Co. under
its contract of July 30, 1903. This contract, in addition to providing
for postal and Admiralty subventions, provided for a loan of £2,-
600,000 ($12,652,900) at the low rate of 24 per cent, to be repaid in
20 years. The Government took a blanket mortgage on the entire
fleet of the company as well as a pledge of its other property, as a
guaranty for the loan, and also became the purchaser of 1 share of
£20 ($97.33). The primary object of this loan was to enable the
Cunard Steamship Co. to build two large steamers of a speed of at
least 25 knots for the north trans-Atlantic trade, for the purpose not
only of competing successfully with the newly organized Interna-
tional Mercantile Marine Co., an American corporation, and the Ger-
man lines, but also to provide auxiliary cruisers of a fast and service-
able character. The British Government was anxious also to keep
the Cunard Line out of the International Mercantile Marine Co., and
the grant of this loan was one of the inducements to the Cunard Co.
to remain a "purely British undertaking.
DIRECT AID.
""
At no time in its history has Great Britain paid a general bounty
on the construction or operation of merchant ships. Its financial aid
has been limited to the payment of fixed amounts for the regular
transportation of British and colonial mails on specified routes by
companies with which special contracts have been made. No general
bounties have been given, as in France, Italy, Austria, and Spain, for
all vessels built in domestic yards or for all vessels operated under the
national flag. In fact, the direct financial aid extended by the British
Government has at no time reached more than 5 per cent of the total
tonnage under the British flag, and has not benefited the hundreds of
cargo ships which have been the main source of strength of the British
merchant marine and the chief reliance of British industry and trade.
The few fast passenger ships operated under mail subvention con-
tracts are better known to the general public than the many un-
attached but efficient 9 or 10 knot cargo boats that carry the bulk of
the British trade, and, for that matter, much of the trade of the
United States and other countries, to the remote corners of the world.
The direct financial aid extended to British merchant shipping
consists of (1) postal subventions, (2) Admiralty subventions, and
(3) colonial subventions. The most important of these are the
postal subventions.
The following table, taken from a House of Commons report show-
ing "all sums payable out of the exchequer of the United Kingdom
in the year 1912-13 in respect of steamship subsidies for foreign and
colonial services" gives a comprehensive view of the subvention
system of Great Britain. It will be observed that in this table the
words subvention" and "subsidy" are used interchangeably, but,
according to the definitions adopted at the outset of this report, the
grants are in fact subventions.
•
52
GOVERNMENT AID TO MERCHANT SHIPPING.
Name of company and service.
Frequency of service.
Termination.
Total sub-
.vention.
Date of contract.
Commencement.
Deductions.
By contri-
bution
from
colonies.
By sea
postage.
Net amount
of subven-
tion.
Union-Castle Mail Steamship Co. (Ltd.)-South-
ampton to Ascension to St. Helena.
Oct. 1, 1893.
I. Subsidies charged to post-office vote:
South Eastern & Chatham Ry. Co.-Dover to Calais.
Great Eastern Ry. Co.-Harwich to Hook of Hol-
land.
Cunard Steamship Co.-Liverpool to New York..
Roya Mail Steam Packet Co.-Southampton to
Trinidad.
Pacific Steam Navigation Co.-Liverpool to Falk-
land Islands; Liverpool to Callao; Panama to Val-
paraiso.
JOct. 22, 1908 a
Oct. 23, 1908.
Jan. 1, 1904.
Jan. 31, 1917
Daily in each direction
b $145,995
c.
Weekly .....……………
48, 665
|
On 6 months' notice….
Daily
Aug. 7, 1902.
Jan. 18, 1911.
Nov. 5, 1927.
Aug. 9, 1917
June 14, 1900
On 12 months' notice..
do.
African Steamship Co. and British & African Steam Jan. 1, 1899 d
Navigation Co (Ltd.)—Liverpool to West Coast
of Africa.
Weekly
Fortnightly
On 3 months' notice... Twice a week e.
4, 137
b 330, 922
b 306, 103
$110, 309
$51, 585
28,323
$145,995
48, 665
4, 137
279,337
167,471
b 155,728
12, 166
144,954
74, 725
24, 308
5, 129
43,974
British India Steam Navigation Co. (Ltd.)-Aden
to Zanzibar.
Nov. 5, 1892.
On 6 months' notice...
Nov. 5, 1909.
Every 4 weeks.
.do.
b 23, 943
3,796
1,153
18,994
Union-Castle Mail Steamship Co. (Ltd.)-South-
ampton to Canary Islands.
Jan. 1, 1904.
(9).
b 43,799
2,433
4,988
38,811
34
2,399
Peninsular & Oriental Steam Navigation Co.-
Brindisi to Bombay
Brindisi to Shanghai..
Brindisi to Adelaide.
Feb. 1, 1908.
Newfound fand-
Canadian Pacific Ry. Co.-Liverpool to Hongkong..
Messrs. Allan Bros. & Co.-United Kingdom to
Apr. 7, 1911
(1)
Jan. 31, 1917.
Apr. 6, 1913.
Colonial contract.
[Weekly
Fortnightly
..do.
Every 3 weeks h¸
III. Subsidy charged to the vote for colonial services:
Royal Mail Steam Packot Co.-Barbados to
II. Subsidy charged to navy funds: Cunard Steamship
Co.
July 30, 1903.
Nov. 16, 1927.
Aug. 29, 1907.
Aug. 28, 1917.
Fortnightly
1,484, 283
372,716
388,089
723,478
v 217,046
121, 663
55,741
39,634
j 9, 246
$9,246
729,975
* 729,207
121, 662
60,831
60,831
Guiana.
a Services at present performed under statutory notice.
b Includes parcel post.
< Service performed in connection with Australian and Far Eastern services.
d Date of commencement. Agreement based on correspondence.
• Extra steamer every 4 weeks.
1 Service extended, at old rate, until July 30, 1913.
Mails carried by noncontract steamers which may call at the islands on the voyages to South Africa.
▲ During the summer and every 4 weeks in the winter.
Agreement based on correspondence.
Paid to Newfoundland as the imperial share of the cost of the postal service between the colony and the United Kingdom.
* $768 deducted on account of penalty.
THE BRITISH EMPIRE.
53
As shown in the above table, postal subventions are the principal
form of direct financial aid granted by the British Government. Of
the total net amount expended for all subventions in the year 1912–13,
$1,522,141 was for postal subventions, $729,207 for Admiralty sub-
ventions, and $60,831 for colonial subventions.
Peninsular & Oriental Steam Navigation Co.-The policy of mak-
ing grants for the regular and fast transportation of mails was begun
in 1837, when a contract was entered into with the Peninsular Co.,
an established line which, in 1845, became the Peninsular & Oriental
Co., for a weekly mail service between England and Spain and
Portugal, with an annual subvention of £29,600 ($144,048). Later
this subsidy was reduced to £20,500 ($99,763) per year. In 1840
the company entered into a contract for the free carriage of mails
between England and Alexandria and granted reduced rates for Gov-
ernment officials; in 1845 it entered into a contract for the free car-
riage of mails between Suez and Calcutta ; in 1851 for the transporta-
tion of mail between Bombay and Suez; and in 1852 for a mail serv-
ice to Australia.
A concise account of the subsidized services of the Peninsular &
Oriental Co. is given on pages 27 to 38 of Dr. Meeker's History of
Steamship Subsidies, and it is unnecessary in this report to do more
than refer to this account and make the following quotation:
If at times the subventions were exorbitant, we must consider the urgent
necessity for the Government to keep up regular communications with the dis-
tant eastern colonies, especially with India, the tremendous difficulties to be
overcome, and the onerous terms of the contracts.
The present contract of the Peninsular & Oriental Co. was entered
into on February 1, 1908, for a period of seven years, which was
later extended to nine years, and calls for a fortnightly service
between Brindisi, Bombay, Shanghai, and Adelaide. That this con-
tract is primarily for the purpose of rapid transportation of mails
is shown by the fact that the starting point of these services is
Brindisi (Italy), to and from which the Far Eastern mails are
carried by express trains.
The gross subvention to this company amounts to £305,000
($1,484,283), but the net cost to the United Kingdom proper in the
year 1912-13 was only £148,665 ($723,478), £79,747 ($388,089) being
deducted for amounts received in postage on mail carried by these
ships and £76,588 ($372,716) for amounts contributed as follows: By
India, £54,588; Ceylon, £4,852; Straits Settlements, £6,475; and
Hongkong, £10,673.
Cunard Steamship Co.-Much more is known by Americans re-
garding the Cunard Co. mail contracts than about the contract of
any other British company.
The first Cunard contract was made in 1838, was for a period of
seven years, and called for the operation of a semimonthly mail
service between Liverpool, Halifax, Quebec, and Boston from March
to October, and a monthly service from November to February,
in return for an annual subvention of £56,000 ($272,524). In
1841 the subvention was increased to £80,000 ($389,320) and in 1846
to £90,000 ($437,985); but it was soon reduced to £85,000 ($413,653).
In 1848 Mr. Cunard added four new steamers to run directly
between Liverpool and New York in competition with the Collins
54
GOVERNMENT AID TO MERCHANT SHIPPING.
Line, a subsidized American enterprise that was then a strong com-
petitor. The British Government paid an annual subvention of
£145,000 ($705,643) for 44 round voyages on this route, increasing
this subvention in 1852 to £173,340 ($843,559) for 52 round voyages.
To give an account of the relations between the Cunard Co. and the
British Government would be a long story. Suffice it to say the re-
lationship has been close from the day when Samuel Cunard made
the first contract until the present and that the Cunard Line has,
throughout its history, been the recipient of special favors from the
British Government. It can safely be said that the grants made to
this company were, for many years, more in the nature of a subsidy
or bounty than of a postal subvention, since they were larger than
the amounts which other lines that had started and developed without
Government aid were willing to accept for the performance of similar
services.
The latest evidence of the close relationship between the Cunard
Co. and the British Government is that shown in the present con-
tract. This contract was made on liberal terms, largely to prevent
this important line from becoming a part of the International Mer-
cantile Marine Co., an American corporation that had recently been
organized with several of the leading British lines as members, and
to give this purely British enterprise the supremacy in the North
Atlantic trade in the matter of speed.
The present Cunard contract calls for an Admiralty subvention
as well as a postal subvention and for the loan of a large sum at low
interest rates to enable the Cunard Co. to build two vessels that
would be faster than any yet built.
This postal subvention runs from August 7, 1902, to November 5,
1927, and amounts annually to £68,000 ($330,922), less receipts from
the sea postage, which were £10,600 ($51,585) in the year 1912–13.
In return the company agreed to operate one mail steamer weekly
in each direction between Liverpool and New York via Queenstown
(later, via Fishguard, Wales). Parcels not to exceed 100 tons
(measurement) per week in each direction, as well as the letter post,
were to be carried on this service.
The Admiralty subvention amounts to £150,000 ($729,975) yearly
and runs for a period of nearly 25 years; in other words, until the
expiration of 20 years from the date on which the second of the
24-25 knot steamship sailed on her first voyage (Nov. 16, 1907).
The previous Admiralty subvention of this company had been only
about £15,000 ($72,998) yearly. The purpose of the large increase
was to compensate the company for the additional cost of maintain-
ing the new fast steamers which were called for by the contract and
which would be especially effective as auxiliary scout cruisers and
transports in time of war.
The increase in the cost of operating fast steamers is out of all
proportion to the additional speed obtained. The extra space re-
quired for engines, boilers, and bunker room, reduces the space avail-
able for passenger accommodations and freight.
The loan to the Cunard Co. has been referred to in detail on
pages 12 and 51. It was made under the present contract and is the
first instance of any British company receiving State aid in this.
form, although loans to shipowners had been instituted in Austria
as early as 1891. The amount of the loan was £2,600,000 ($12,652,900)
THE BRITISH EMPIRE.
55
and the rate of interest 2 per cent. Undoubtedly the company
could have borrowed this sum on its own security, but at a rate of
interest about 2 per cent higher. The saving of interest has, there-
fore, amounted to a very large subvention.
In referring to the benefit derived from securing the loan of so
large an amount at low rates of interest, Fairplay, in its issue of
April 9, 1914, page 710, says:
It should be pointed out that had the money been borrowed at 5 per cent the
extra amount of interest payable during the past year would represent a divi-
dend of over 4 per cent on the ordinary shares of the company.
The British Government is a stockholder in the Cunard Co. to the
extent of one share and has a mortgage on its fleet and other prop-
erty as a security for the loan. The Government has, moreover,
the right to charter or purchase at agreed rates all or any of the
company's vessels at any time, and requires that the company shall
remain a purely British undertaking; that its management shall be
in the hands of, and that its shares and vessels shall be held by,
British subjects only; that it shall not give preferential rates to for-
eigners; and that it shall not unduly raise freights.
Royal Mail Steam Packet Co.-This company has been in receipt
of posta. subventions from the British Government continuously
since 1842. The subvention (perhaps subsidy would more correctly
describe the character of the grant at that time) amounted to £240,000
($1,167,960) per year. In 1852 the grant was raised to £270,000
($1,313,955), the. required mileage from 392,973 miles to 547,296
miles, and the average speed of vessels from 6 knots to 9 knots per
hour. In 1864 the subsidy was reduced to £172,914 ($841,486), while
the speed requirement was raised to 10.5 knots. Upon the renewal of
the contract in 1868 for six years the Government required that it
should receive one-half of all profits in excess of 8 per cent, this
being the first instance of such a provision, which is now to be found
in the recent mail contracts of the Austrian Lloyd and several French
companies.
In 1874 the grant was reduced to £84,750 ($412,436), but it was
soon raised to £86,750 ($422,169). In 1878 the grant was reduced to
£80,000 ($389,320), but it was increased to £85,000 ($413,653) in
1890, when the service was put on a fortnightly basis.
The present contract of the Royal Mail Steam Packet Co., which
was entered into on January 18, 1911, and runs to August 9, 1917,
also calls for a fortnightly service. The gross amount of the sub-
vention is £62,900 ($306,103), less receipts from sea postage, which
amounted in the year 1912-13 to £5,820 ($28,323), and the contribu-
tions of the colonies, which amount to £22,667 ($110,309), distributed
as follows: Barbados, £3,667; British Guiana, £2,700; Trinidad,
£16,300.
Pacific Steam Navigation Co.-This company is another im-
portant British steamship line that has been in receipt of Govern-
ment aid since about 1840. The original grant to this company was
small and was for the carriage of mails between Central and South
American ports. As Dr. Meeker points out, no imperialistic reason
inspired this subsidy, as the company's steamers touched at no
British ports.¹
1 Meeker: History of Shipping Subsidies, p. 26.
56
GOVERNMENT AID TO MERCHANT SHIPPING.
The present contract of this company was entered into on June
14, 1900, and is subject to termination on one year's notice. It pro-
vides for a fortnightly service between Liverpool and the Falkland
Islands, and between Liverpool, Panama, Callao, and Valparaiso.
The total subvention is £32,000 ($155,728) per year, less a contri-
bution of £2,500 ($12,166) by the Falkland Islands and the receipts
from sea postage. In the year 1912-13 the British Government was
at no expense on account of these services, since the receipts from
sea postage were £29,786 ($144,954).
The Pacific Steam Navigation Co. for a number of years received
an annual subvention from the Chilean Government, but this has
been discontinued and valuable privileges at the Government wharf
at Valparaiso have been substituted therefor.
South Eastern & Chatham Railway Co.-For many years the
British Government has made large grants for the maintenance of
fast cross-channel service between Dover and Calais. The present
contract dates from October 23, 1908, and terminates January 31,
1917. A grant of £30,000 ($145,995) is made for a daily trip in
each direction and of £10,000 ($48,665) for a weekly service.
Great Eastern Railway Co.-Another cross-channel service that is
in receipt of a subvention is that of the Great Eastern Railway Co.,
which operates one boat daily in each direction between Harwich and
Hook of Holland. The subvention is £850 ($4,137) per year.
•
Other mail subvention contracts.-The table on page 52 shows
several additional steamship mail contracts, none of which, however,
provides for a large net payment on the part of the British Gov-
ernment. The most important of these contracts was that of the
Canadian Pacific Railway Co., which provided for a subvention of
£44,600 ($217,046), of which amount Canada paid £25,000
($121,663), and from which sea postage to the amount of £11,454
($55,741) was deducted in the fiscal year 1912-13.
This contract, which is now assumed entirely by Canada, provided
for one voyage in each direction every three weeks during the sum-
mer and every four weeks during the winter between Liverpool and
Hongkong via Halifax, St. John's, Rimouski, or Quebec and Van-
couver (by rail), Yokohama, and Shanghai. It was also provided
that the company should carry mails by any other of their steamers
plying between the United Kingdom and Canada.
Details as to the present contract of the Canadian Pacific Railway
Co. will be found in the section on Canada, at page 64.
Earnings of steamship companies.-Many details as to the earn-
ings of British steamship companies are at hand. The following
table¹ shows the earnings of cargo steamship companies operating
under the British flag for the years 1904 to 1915, inclusive, with an
average for the 12-year period.
The lines covered for 1915 had 585 vessels, with a gross tonnage of
2,338,868 tons, and paid dividends averaging 11.43 per cent in that
year, 10.38 per cent in 1914, and 12.56 per cent in 1913, after setting
aside large amounts for depreciation. None of these ships received
a shilling of financial aid from the British Government.
• Reproduced from Fairplay of Dec. 23, 1915, p. 1122.
THE BRITISH EMPIRE.
57
1904...
1905.
1906..
1907...
1908..
1909.
1910.
1911..
•
1912..
1913..
1914.
1915.
Average.
1904.
1905.
1906..
1907..
1908..
1909..
1910...
1911..
1912.
1913..
1914..
1915..
Average.
Year.
Paid-up Debenture Book value
capital. loans. of steamers.
Ves-
sels.
Tons gross.
$36, 957, 554
41,742,034
$15,364, 163
$52,333, 134
393
1, 184, 358
18,374,352
60, 119, 006
464
1,362, 049
39, 330, 080
44, 730, 005
17,855,870
59, 031, 032
433
1,336, 823
21, 650, 595
66, 830, 476
490
1,516, 401
46,827, 414 | 21,867,145
69, 779, 051
533
695, 837
46,314,534 | 24, 259, 751
67, 719, 752
508
1,603, 341
46,360,712
27,004,160
71,576, 857
522
1,725, 335
48, 255, 260
30, 472, 198
76, 490, 377
535
51,389, 476
29, 481, 682
80,187,043
561
822,260
981, 209
53,356, 832
26, 718, 947
81, 187, 649
598
2, 121, 427
52, 762, 720
22,763,399
75, 857, 581
569
2,067, 403
68, 654, 197
30, 932, 983
|
85, 747, 097
585
2,338, 868
48,005,945 | 24, 736, 420 |
70,532, 331
515
1,722, 182
Dividend.
Profit on
Year.
Deprecia-
tion writ-
voyages.
Amount.
Per
cent.
ten off.
Deprecia-
tion 5 per
cent.
$3,117, 193
$1,354, 298
3.64
$1,058, 658
$3,029, 291
3,711, 670
1,391, 843
3.33
1,160, 685
3,605,595
4,766, 956
1,593, 811
4.05
1,696, 710
5, 252, 204
3,582, 137
1,864, 244
4.17
2, 011, 762
5,874, 026
4,052, 204
1,671, 080
3.48
1, 915, 922
3, 153, 477
875, 415
1.89
919, 978
4, 100, 080
1,059, 345
2.30
1,411, 846
7,161,254
1,800, 902
3.73
2,462, 644
13, 964, 470
3, 506, 596
6.82
7, 124, 162
263, 871
4,077, 592
4, 205, 511
4,589, 538
920, 168
26, 794, 219
6,704, 163
12.56
16, 276, 710
224, 366
18, 629, 415
23, 077, 444
5, 480, 015
10.38
9,462, 729
882, 798
7,852, 940
11.43
10, 808, 930
5,282,279
8, 018, 746
2,925, 720
6.09
4,691, 997
4,317,946
Details as to the number, gross tonnage, and book value of vessels
operated by individual cargo-steamship companies, together with
the profits on voyages, the amounts set aside for depreciation, and
the rates of dividend are shown for the year 1915 in the following
table.¹ One of the interesting facts disclosed in this table is the large
number of companies operating only one or two boats. It will be
observed also that only two companies failed to declare a dividend in
1915, while only two declared a dividend of less than 5 per cent. The
dividends in most instances were high, and liberal amounts were set
aside for depreciation.
Name of company.
Vessels.
Gross
tonnage.
Book value Profit on
of vessels.
voyages.
Depre-
ciation.
Rate of
dividend.
Adam Steamship Co..
Per cent.
3
Ariadne Steamship Co.
3
Birkdale Steamship Co..
11,028
10,931
$256, 708
310, 604
1
2,961
145,995
Bradford Steamship Co.
$109, 696
210, 602
3,450
$50,918
20.00
200, 432
40.00
3
Britain Steamship Co..
13, 119
510, 983
193, 653
72,998
11.00
18
68, 044
British Empire Steam Navigation
2, 554, 913
368, 540
10.00
Co...
6
29,859
Burns Steamship Co.
1,823, 468
222, 720
10.00
2
2, 615
485, 599
17,257
Cairn Line.
2.50
16
44, 722
1,660, 099
Cardigan Steamship Co..
418, 431
113, 224
10.00
1
4, 534
190, 932
Century Shipping Co..
58,632
15.00
7
32, 479
1,079, 020
Court Line.
602, 925
121, 663
17.36
7
26, 482
954, 788
Cressington Steamship Co.
204, 748
48, 605
10.00
1
Cuban Steamship Co.
4,396
121, 663
33, 389
9, 733
12.00
5
15, 837
Dene Steamship Co..
414, 869
201, 804
53, 532
25.00
Dowgate Steamship Co...
Dunedin Steamship Co...
Eagle Oil Transport Co...
Eastern & Australian Steamship Co.
3630-
10,852
316, 323
116, 071
48, 665
10,00
21, 563
13, 745
987,277
38, 655
5.00
458, 911
79, 402
37,959
4
18 142, 659
16,009
12.50
10,703, 872
652, 495
1,474, 043
455, 047
6.00
148, 457
93, 237
6.00
1 Reproduced from Fairplay of Dec. 23, 1915, p. 1120.
58
GOVERNMENT'AID TO MERCHANT SHIPPING.
Name of company.
Vessels.
Gross
tonnage.
Book value Profit on
of vessels.
voyages.
Depre
ciation.
Rate of
dividend.
Empire Transport Co.
Per cent.
18
Ericson Shipping Co..
80,456
$3,708, 765
$904, 906
$243, 325
8.22
2
3,806
Eskside Shipping Co.
167, 958
44, 864
19,043
15.00
3
Fargrove Steam Navigation Co..
10,483
339, 468
56, 826
38, 932
7.50
10
Field Line (Cardiff).
33, 462
1, 187, 426
280, 729
97, 330
10.00
5
Field Steamship Co.
14, 603
684, 249
51,405
10.00
2
Glenroy Steamship Co.
Goole & West Riding Steamship Co..
Great City Steamship Co.
Griffiths, Lewis, Steam Navigation
Co..
Gulf Line..
6, 133
203, 376
19, 325
5.00
143
2,755
155, 728
7,485
5.00
4, 175
214, 978
17,884
11, 436
6.00
15, 109
832, 147
245, 057
72, 998
8.00
4
15, 137
820,00₺
153, 256
20.00
9
Hain Steamship Co
35, 596
1,511, 063
253, 671
1.45, 995
5.00
39
139,957
Harrowing Steamship Co.
4,878, 277
1,536, 374
900, 303
20.00
6
Hathor Steamship Co...
19, 864
922, 601
226, 317
1
177, 627
5.00
Hindustan Steam Shipping Co..
4, 147
48, 665
20, 240
10.00
4
Instow Steamship Co.
14, 778
661, 713
271,594
170, 907
20.00
1
Llandrindod Steamship Co.
International Line Steamship Co.
Irish Shipowners' Co..
Jones, W. & C. T., Steamship Co..
King Line.
Laming D'Ambrumenil Steamship
Co...
Lancashire Shipping Co...
1,298
84, 716
119,954
15.00
13
ar-36
9
33, 879
1,025, 391
207, 697
97,330
14.81
7
29, 209
1, 119, 295
229, 271
145, 995
5.00
53, 770
1,610, 631
435, 041
218,993
10.00
24, 062
735, 815
84, 789
8,760
8.00
Llangollen Steamship Co..
2811
8, 203
316, 415
103, 515
24, 264
20.00
36, 119
1,290, 056
a 78, 341
(0)
7.50
3,841
194, 660
150, 156
145,995
26. 62
London-American Maritime Trad-
ing Co...
3,842
194, 660
142, 511
145, 995
15.00
10
London & Northern Steamship Co.
42,050
2,271, 789
666, 711
262, 791
20.80
19
64, 866
Manchester Liners.
2, 149, 694
730, 603
475, 077
13.33
14
Mercantile Steamship Co.
63,570
2,709, 653
1,001, 730
746, 224
9.93
12
Mitre Shipping Co.
44, 365
958, 701
418,855
189, 794
12.62
4
Monarch Steamship Co.
18,264
1,056, 548
298, 170
345, 453
12.50
10
46, 688
Moor Line..
2,257, 414
360, 394
194, 660
15.00
27
Nautilus Steamship Co..
99, 608
2,965, 801
530, 079
316, 323
10.48
13
Neptune Steamship Co...
51,310
1,470, 520
398, 425
218, 993
12.50
6
Nitrate Producers' Steamship Co……….
23,304
919, 793
389, 461
124, 660
12.45
10
Palace Shipping Co.
Orders & Handford Steamship Co………
54, 827
810, 710
739, 246
486, 650
•
12.33
7
17, 174
367, 421
356, 267
116, 796
20.CO
3
Peareth Steamship Co..
14, 431
431, 683
179, 642
85, 164
15.00
4
Pool Shipping Co..
14, 653
704, 752
96, 157
20.00
14
Pyman Steamship Co.
60,517
2, 101, 034
577,585
225,587
15.00
10
Red R..
37,555
1,258, 399
418, 217
121,663
20.00
4
Redcroft Steam Navigation Co.
14,474
469, 958
466, 931
218,993
37.32
3
Rochdale Steamship Co..
12, 184
492, 884
75,343
24,333
10.00
1
Rowland & Marwood's Steamship
3,718
127, 746
3,723
5.00
Co.
10
Scholefield Steamship Co..
Seaton Shipping Co.
Smailes & Son's Steamship Co..
Snowdon Steamship Co.
St. Just Steamship Co...
State Steamship Co.
Strick Line….
•
Sutherland Steamship Co.
Tatem Steam Navigation Co.
Taylor & Sanderson Steamship Co..
Temperley Steamship Co....
Tempus Shipping Co...
Thompson Steam Shipping Co.
Town Line...
19
0624,
4122760
29,311
819, 090
431,318
243,325
20.00
5
14,922
364, 696
228, 399
82, 731
20.00
6,747
423,308
29,948
4,867
5.00
14,042
499, 274
206, 267
95,529
20.00
3, 189
8,658
9,100
26, 989
92,522
437,985
5,280
144, 516
48, 665
11.00
291, 990
79, 621
31,584
10.00
1, 104, 009
247,559
320, 571
8.19
59,931
1,654, 956
534, 541
340, 655
20.00
84, 472
1,703, 275
991, 496
412, 193
15.00
8
18, 207
514,803
423,551
66,613
35.00
2
7,546
364, 326
181,623
77,864
30.00
6
15, 417
525,582
100, 352
Trechmann Steamship Co..
Turnbull Scott Shipping Co.
Ulster Steamship Co.
17
West Hartlepool Steam Navigation
Co....
16
Wetherall Steamship Co..
Wirral Transport Co..
Woodfield Steamship Co.
anaã Iwwero
6
34, 246
10.00
20,328
659, 289
>
121,083
58,398
6.90
5
7,058
254, 586
99, 233
3
48, 665
20.00
9,432
437,508
35, 852
7.50
3
8,987
157,933
17,699
5.00
51,927
1,800, 605
273,556
111, 930
10.88
53, 761
2,313,106
592, 900
388, 449
2.68
6
5,367
253, 058
141, 299
2
48, 665
16.00
9,774
360, 038
217,815
175, 194
6
12. 50
20, 566
654, 092
123, 449
24,333
10.00
Total..
585
2,238,868 85,747,097 | 23, 578, 193| 10, 808, 930
11.43
a In addition to sums transferred to depreciation.
¿ Not reported.
Details as to the earnings of representative British passenger
steamship lines during the year 1914 are shown in the following
table, which covers 25 lines, with a total of 966 vessels, having a
gross tonnage of 5,106,495 and a book value of $292,223,371:
1
1
¹ Reproduced from Fairplay of Dec. 24, 1914, p. 1038.
THE BRITISH EMPIRE..
59
Steamship lines.
l'aid-up
capital.
De-
bentures.
African Steamship Co.
Anchor Line………
Australasian Steam Navigation Co.
Booth Steamship Co...
British & African Steam Navigation Co.
British Indian Steam Navigation Co.
China Mutual Steam Navigation Co.
Clan Line...
Cunard Steamship Co…….
Elder Line….
Ellerman Lines
Houlder Line
Imperial West India Mail Co..
Indo-China Steam Navigation Co....
Lamport & Holt.
F. Leyland & Co..
National Steamship Co..
New Zealand Steamship Co.
Oceanic Steam Navigation Co..
Orient Steam Navigation Co.
Pacific Steam Navigation Co..
Peninsular & Oriental Co.
Prince Line.
--
Royal Mail Steam Packet Co..
Union Castle Co……….
$4,866, 500
2,798, 237
2, 166, 576
$784, 528
2,262, 922
$815, 228
1,523, 947
523,947
1, 193, 485
1,463, 571
2,676, 575
Sundry
creditors
and loans.
Book value
of
fleet.
$6,571, 444
6, 425, 478
4,362, 608
1,946, 600
1,009, 015
6, 134, 676
4,866, 500
1,449, 730
1,966, 767
8,064, 764
5, 256, 647
9, 290, 976
4,565, 336
2,473, 326
21, 358, 162
2,022, 041
6, 434, 924
3,649, 875
3,406, 550
1,294, 275
11, 431, 408
8,638, 135
15, 470,000
7,551, 577
26, 378, 172
2, 433, 250
841, 953
1,185, 095
3,806, 896
11, 867, 109
4,294, 012
14, 630, 056
2,307, 913
973, 300
2,435, 761
1,459,950
3,762, 612
4, 014, 887
1,063, 807
2,413, 249
2,325, 554
1,178, 910
179, 243
3,384, 928
4,428, 515
4,866, 500
1,226, 387
1,120, 020
12, 722, 734
1,531, 488
1,237, 296
11, 646, 196
1,094, 962
5, 515, 691
1,855, 596
3,649, 875
5,466, 574
1,554, 922
2, 305, 813
7,299, 750
17,032, 750
8,759, 700
4,727, 843
2,927, 275
1,149, 195
111,832
3,040, 589
14, 774, 874
1,993, 737
2,734, 477
385, 573
5,567, 743
36, 208, 288
9,427,394
10, 423, 556
16,057, 241
5,869, 038
20,439,300 17,032,750
9,019, 869
43, 421, 726
9,733,000
4,959, 314
4,401, 258
20, 460, 752
Total..
147,079, 621 87,041, 520
|
75,904, 630
292, 223, 371
Fleet.
Sundry
Dividend.
Steamship lines.
debtors, in-
vestments,
Ves-
cash, etc.
sels.
Gross
tonnage.
Amount.
Per
cent.
African Steamship Co....
Anchor Line……….
Australasian Steam Navigation Co.
Booth Steamship Co.....
British & African Steam Navigation Co.
British India Steam Navigation Co....
China Mutual Steam Navigation Co..
Clan Line....
Cunard Steamship Co.
Elder Line.
Ellerman Lines.
Houlder Line..
Imperial West Indian Mail Co.
Indo-China Steam Navigation Co………
Lamport & Holt...
F. Leyland & Co.
National Steamship Co.
New Zealand Steamship Co....
Oceanic Steam Navigation Co..
Orient Steam Navigation Co....
Pacific Steam Navigation Co..
Peninsular & Oriental Co...
Prince Line.
Royal Mail Steam Packet Co.
Union Castle Co.
$1, 109, 631
2,308, 570
556, 878
1,435, 569
3,262, 020
7, 106, 204
120
1,084, 076
246, 303
7,773,007
810, 131
2,019, 228
609, 291
769, 549
968, 920
1,172, 822
5, 396, 082
*#989828585*****
69,293
$389,320
8.00
14
85,819
269,203
9.63
62, 250
163,592
8.00
109,989
80,267
3.00
115, 826
145, 995
3.00
544, 910
636, 149
7.28
164,575
553,832
22.39
251, 570
548, 455
15.00
284, 097
587, 640
6.80
97, 287
121, 662
5.00
432, 793
1,099, 333
5.16
68, 368
34, 609
145,995
10.00
91,706
132, 729
5.50
196, 181
305, 616
6.90
273,067
1,032, 438
& 11
416, 266
2
16,005
6, 133, 430
20
143, 848
419, 191
7.60
6, 205, 294
42
434, 083
2,372, 419
65.00
998, 161
2,410, 363
22, 543, 623
92
Total....
343, 497
7,606, 495
4,858, 602
88, 217, 226
43
65
43
-*2***
9
97,390
359, 522
23.16
35
197, 787
437,985
6.00
505, 615
1,416, 151
8.31
170, 397
146, 364
5.00
342, 667
316, 363
1,182, 559
5.78
608, 322
6.25
966
5, 106, 495 | 12, 679, 118 8.26
In commenting on the facts shown in the above table, the editor of
Fairplay says:¹
1
Another table contains a summary of the figures of 25 of the liner companies.
The companies enumerated in the list have a capital of £30,222,875 ($147,079,-
621), on which the shareholders received a dividend of 8.26 per cent, which
compares with 10.37 per cent in the previous year and 7.79 per cent two years
ago. It will be seen that the tonnage owned stands in the books of the com-
panies at £11 15s. 2d. per ton gross. In considering the dividends paid, it should,
be borne in mind that some of the companies in the past have accumulated large
1 Fairplay, Dec. 24, 1914, pp. 1042-1043.
60
GOVERNMENT AID TO MERCHANT SHIPPING.
reserves which are employed in the business.
For instance, the P. & O. Co.
has nearly £2,000,000 ($9,733,000) of reserves, and if the earnings were dis-
tributed over the whole of the capital employed in the business they would work
out at less than 5 per cent after providing for 5 per cent depreciation and run-
ning the fleet uninsured, while the Oceanic Co. would show a profit of only 8.39
per cent instead of 65 per cent.
The return to the shareholders of the Ellerman Lines can not be ascertained
in so far as Sir John Ellerman holds 50,000 management shares, which take all
the profit after the preference and preferred ordinary shareholders have been
paid their fixed dividends, and the amount of this profit is not disclosed.
Whether the return exceeds the profits on the Bucknall management shares,
which the Ellerman Lines took over, viz, 20,000 per cent, we are not in a position
to state.
The China Mutual Steam Navigation Co. again pay a dividend on the small
deferred capital of 106 per cent, which is, we should say, almost a record. As
against this it may be stated that the International Mercantile Marine Co.,
of New Jersey, which controls the White Star Line, the Leyland Line, and sev-
eral other companies under the British flag, has defaulted on its debenture in-
terest, and some developments are expected should they be unable to pay the
interest when due next March.
The principal deal of the year has been the purchase of the British India Co.
by the P. & O. Co., which increases the tonnage owned by the latter company
to about 1,256,884 tons gross, which compares with 1,716,440 tons controlled by
the Royal Mail Co. Although Sir Owen Philipps has not purchased any more
fleets during the year, he has formed a new company (R. M. S. P. Meat Trans-
port, Ltd.), with a capital of £1,000,000 ($4,866,500), to run a line of meat
steamers between the Plate and this country, to carry out new contracts for
which four steamers have already been ordered. Several of Sir Owen's com-
panies have been in the market for fresh capital. Messrs. Elder Dempster &
Co. in February invited subscriptions for £250,000 of 6 per cent preference
shares, the Royal Mail Co. in the same month issued £700,000 of 5 per cent de-
benture stock at 101 per cent, and a further £750,000 at £97 10s. last month,
while Messrs. Lamport & Holt issued £300,000 6 per cent preference shares in
July.
Messrs. Furness, Withy & Co. during the year have acquired a large interest
in the Johnston Line, of Liverpool, and purchased the shares in the British &
Irish Steam Packet Co. In addition they have made several public issues. In
January they issued £500,000 of debentures in the Empire Transport Co. at 97
per cent, in the following month they were largely responsible for the issue of
£1,300,000 of 5 per cent debentures in the Canada Steamship Lines at 93 per
cent, and in the same month they issued £250,000 of 5 per cent debentures in
the British Empire Steam Navigation Co. at 97 per cent. In July the company
also formed the Furness-Houlder Argentine Lines, with a capital of £1,000,000,
to run a line of steamers to the Plate, and five steamers were ordered for the
company. The largest shipping issue of the year was made by the Oceanic
Steam Navigation Co. in July, when subscriptions were invited for £1,500,000
of 4 per cent debentures at 95 per cent to pay for the new Britannic, now
building, and other purposes.
Further details respecting two of the larger passenger lines flying
the British flag are shown in the following tables, which give a
summary of the financial statements of the Peninsular & Oriental
Steam Navigation Co. and the Cunard Steamship Co. for the years
1910 to 1914:
PENINSULAR & ORIENTAL STEAM NAVIGATION CO.
Items.
1910
1911
1912
1913
1914
Vessels:
Number..
Gross tonnage.
Capital, paid up.
62
450, 848
64
464, 813
71
538,903
70
546, 116
67
550, 407
Debentures..
Reserve fund..
$11,290, 280 $11, 290, 280
8,759, 700
6,083, 125
$17,032,750 $17,032,750
$17,032, 750
8,759, 700
6,083, 125
8,759, 700
6,083, 125
8,759,700
8,759, 700
6,686, 571
Contingent fund……
6,686, 571
2,189, 925
Value of fleet (reduced book value)….
2,189, 925
17,789, 788 15,025, 426 | 16,042, 868 | 16, 429, 260
16,057, 242
THE BRITISH EMPIRE.
61
PENINSULAR & ORIENTAL STEAM NAVIGATION CO.-Continued.
Items.
Operating account:
Receipts, total……….
1910
1911
1912
1913 a
1914
14,510,514
1,446,048
466,045
323,567
15,403, 109
10,418,169
945, 586
908,930
204,400
Depreciation of fleet.
2,363,908
Incon e tax….
4,683
Interest on debentures..
306, 590
Miscellaneous expense.
250,843
Operating revenue..
Government contract service.
Interest, discount, etc..
Amount brought forward..
Expenditures, total....
Operating expenses.
Administrative expense.
Repairs and maintenance.
Insurance...
$16,746,174 $16,895, 559 $17,515,254 $26, 117, 112 | $25, 569,950
874, 741
2,414,567
2,105
138.975
2,238, 191
23,753, 609
1,484, 282
(0)
332, 059
23,819,457
19,882,817
1,065, 753
(c)
259,803
2,190, 100
306,590
114,394
14,677,790
15,227,698
1,441, 151
1,439,846
24,303,049
1,484, 282
449, 678
518,653
326, 940
329,057
(0)
329,780
15,550,377
16,020,556
23,394, 264
10,312,275| 10,203,471
18,172, 930
964, 495
968, 457
1.030, 624
1,001,578
1,037, 509
1.304,025
51,994
2,723, 009
306, 590
306,590
190, 436
213, 116
306.590
202, 929
Net earnings...
1,343, 065
1,345, 182
1,494, 698
2,722,848
1,750, 493
Distribution of earnings:
Dividends, total..
1,016, 125
1,016, 125
Preferred stock..
282,257
282, 257
1,164,918
318, 147
1,416, 151
1,416, 152
Rate...
Common stock.
783,868
Rate.
13%
Balance carried forward.
326, 940
5%
846, 771
15%
334,343
a New system of accounts instituted in 1913, in which operating revenues and operating expenses are
shown in full for first time.
569, 381
569, 381
5%
5%
5%
5%
733,868
846, 771
846, 770
13%
15%
329,057
329, 780
15%
332,059
b Included with operating revenue.
c Included with operating expenses.
Vessels:
Items.
CUNARD STEAMSHIP CO. (LTD.).
1910
1911
1912
1913
1914
14,932, 561
141, 143
34,008
12, 923, 182 |
8, 294. 484
526.372
1,028,200
370, 764
Depreciation of fleet.
2,077, 049
Number...
Gross tonnage.
Capital, paid up.
Debentures..
Reserve fund
Insurance fund….
Contingent fund.
Value of fleet (reduced book value)…………
Operating account:
Receipts, total…….
Operating revenue..
Government contract service.
Interest, discount, etc...
Amount brought forward.
Expenditures, total..
Operating expenses.
Administrative expense..
Repairs and maintenance...
Insurance.
22
224, 311
$7,786, 497❘
18,541,365
3,406, 550
412, 741
26
267, 107
25
259, 520
27
284,097
27
316, 862
$7,786, 497 |
17,519, 400
3,893,200
$8,638, 135 |
16, 497, 435
4,379,850
$8,638, 135
15,475, 470
4,866,500
543,963
271, 446
288,057
377,562
131,325
24,910,840 | 27,112, 634 | 28, 515, 714 | 32,092, 227
$8,638, 135
14,453.505
4,866,500
752, 257
687,817
34,516,391
20, 575,596
19,848, 873
92,239
634, 484
18,087, 543
9,101,578 | 10,637,009 |
683, 610
1,328, 625
734, 996
1,319,829
324, 766
2,137,542
824, 595
1,286, 904
796, 690
2,532, 860
15, 107, 712 | 15,397, 113 | 18,013,664 | 18, 551, 034
14,994, 969
108,536
293, 608
13,770,000 | 16, 155, 348
17,443, 193
145, 772
424, 699
17,810,289
307,800
432, 945
16,390, 020
11, 222, 751
11, 985, 848
573,037
871, 823
430, 337
2,200, 808
442,818
2,422,298
Income tax.
1,522
2,711
Interest on debentures.
575,006
541,236
Miscellaneous expense.
49.785
48,470
Net earnings..
2,184,530
1,627, 113
49, 430
528, 705
62,853
1,958, 316
83,831
511, 307
54, 998
2,161, 014
95, 692
493, 910
71, 044
2,488, 053
Distribution of earnings:
Dividends, total..
Preferred stock.
Rate...
389, 325
389.325
5%
467, 191
233,592
587, 640
276, 174
587,640
276, 174
899, 105
276, 174
Common stock..
5%
233.599
5%
311,466
Rate...
77%
To reserve account.
340.655
Balance carried forward.
293.608
486, 650
424.699
10%
.486, 650
432, 945
5%
311.466
10%
486, 650
634, 484
5%
622,931
20%
691,023
62
GOVERNMENT AID TO MERCHANT SHIPPING.
CANADA.
The number of postal_subventions paid by the Government of
Canada is considerable. Two of these are authorized by statute, one
calling for the payment annually of $121,666.66 to the Canadian
Pacific Railway Co. for a service between Liverpool and Hongkong
via Halifax, and the other calling for an annual payment of $200,000
to H. & A. Allan for a service between Canada and France. The
other subventions are paid in accordance with short-term contracts
entered into by the Post Office Department subject to ratification by
the Canadian Parliament.
The following table¹ shows the amounts provided for "mail subsi-
dies and steamship subventions" for the year ending March 31, 1916,
as compared with those for the year ending March 31, 1915:
Services and lines.
AUTHORIZED BY CONTRACT.
Atlantic Ocean services:
Canadian Atlantic ports and Australia and New Zealand.
Canada and Great Britain..
Canada and Newfoundland..
Canada, the West Indies, and South America.
Canada and South Africa..
Halifax, St. John's, Newfoundland, and Liverpool.
Montreal, Quebec, and Manchester (in summer) and St. John, Halifax,
and Manchester (in winter)
St. John, Dublin, and Belfast (winter)
St. John and Glasgow (winter).
St. John, Halifax, and London (winter).
St. John, Halifax, and London...
1914-15
1915-16
$140,000.00
1,000,000.00
70,000.00
340, 666.66
$140,000.00
1,000,000.00
70,000.00
340,666.66
146,000.00
146,000.00
20,000.00
20,000.00
35,000.00
35,000.00
7,500.00
7,500.00
15,000.00
15,000.00
16,500.00
15,000.00
25,000.00
26,000.00
180, 509.00
Pacific Ocean services:
Canada, Australia, or New Zealand, or both (Pacific).
Canada, China, and Japan...
Prince Rupert and Queen Charlotte Islands..
Victoria and San Francisco.
Victoria, Vancouver, and Skagway..
Victoria and west coast Vancouver Island.
Vancouver and northern ports of British Columbia.
Local services:
Baddeck and Iona.
229,000.00
16,000.00
3,000.00
180, 509.00
253,333.34
16,000 00
3,000.00
12,500.00
12,500 00
5,000.00
5,000.00
17,600.00
16,800.00
5,825.00
5,825.00
Charlottetown, Victoria, and Hollidays Wharf.
Froudes Point and Lockport, Nova Scotia.
Gaspe Basin and Dalhousie or Campbellton
• •
2,500.00
2,500.00
600.00
600.00
20,000.00
20,000.00
Grand Manan and the mainland.
10,000.00
10,000.00
Halifax and Canso...
5,000.00
5,000.00
Halifax and Newfoundland via Cape Breton ports...
10,000.00
10,000.00
Halifax, Mahone Bay, Tancook Island, and La Have River.
4,000.00
4,000.00
Halifax and Spry Bay.
4,000.00
4,000.00
Halifax, South Cape Breton, and Bras d'Or Lakes…..
4,000.00
4,000.00
Halifax and west coast Cape Breton.
4,000.00
4,000.00
Halifax and Sherbrooke….
2,000.00
2,000.00
Kenora and Fort Frances...
8,000.00
8,000.00
Mainland and Magdalen Islands...
18,000.00
18,000.00
Mulgrave and Canso.....
6,500.00
6,500.00
Mulgrave and Guysboro..
5,500.00
5,500.00
Newcastle, Neguac, and Escuminac, Miramichi River and Bay...
Pelee Island and the mainland…
2,500.00
2,500.00
8,000.00
8,000.00
Petit de Grat and I. C. Ry. terminus at Mulgrave.
7,000.00
7,000.00
Potitcodiac River, Moncton, and way ports.
2,500.00
Pictou, Montague, Murray Harbor, and Georgetown.
2,500.00
6,000.00
6,000.00
Pictou, New Glasgow, Antigonish County, and Mulgrave.
1,000.00
1,000.00
Pictou, Mulgrave, and Cheticamp.
7,500.00
7,500.00
Port Mulgrave, St. Peter's, Irish Cove, and Marble Mountain..
6,500.00
6,500.00
Prince Edward Island, Cape Breton, and Newfoundland...
Prince Edward Island and the mainland.
16,500.00
16,500.00
12,500.00
12, 500.00
Quebec and Harrington..
28,000.00
28,000.00
Quebec and Gaspe Basin.
8,500.00
8,500.00
Quebec and Isle of Orleans…….
4,500.00
4,500.00
Riviere du Loup, Tadousac, and north shore ports.
6,000.00
6,000.00
Riviere du Loup, Tadousac, and St. Lawrence ports (winter)..
8,000.00
8,000.00
St. Catharines Bay and Tadousac.
3,500.00
3,500.00
St. John and Cumberland Basin..
3,000.00
3,000.00
St. John and St. Andrews, New Brunswick
4,000.00
4,000.00
1 Dominion of Canada: Report of the Department of Trade and Commerce for year ending
Mar. 31, 1914, Pt. VI, p. 3.
THE BRITISH 63
!
EMPIRE.
Services and lines.
AUTHORIZED BY CONTRACT-continued.
1914-15
1915-16
f
Local services-Continued.
St. John and Bridgetown...
St. John and Digby.
$2,500.00
$2,500.00
20,000.00
St. John, Digby, Annapolis, and Granville
20,000.00
2,000.00
St. John, Bay of Fundy, and Minas Basin.
2,000.00
St. John, Westport, and Yarmouth.
8,000.00
8,000.00
St. Stephen, New Brunswick, St. Croix River, Deer Island, and Campo-
8,500.00
8,500.00
bello..
Sydney and Bay St. Lawrence.
6,000.00
6,000.00
6,000.00
Sydney and Whycocomagh
6,000.00
3,000.00
Sydney and east coast Cape Breton.
3,000.00
Expenses of supervision..
5,500.00
5,500.00
Appropriations for 1914-15, not required for 1915-16..
3,000.00
3,000.00
11,500.00
Total......
2, 600, 700. 66
2,611,234.00
AUTHORIZED BY STATUTE.
Canada, China, and Japan (1-2 Geo. V.. ch. 25)
Canada and France (809 Ed. VII, ch. 36)
Total....
121, 666. 66
200,000.00
121,666.66
200,000.00
2,922, 367.32
2, 932, 900. 66
Details as to the duration of contract and various references as to
speed and frequency of service, equipment, etc., for the more im-
portant services are given in the following table:i
1 Dominion of Canada: Report of Department of Trade and Commerce for year ending
Mar. 31, 1914, Ft. VI, pp. 7–59.
64
GOVERNMENT AID TO MERCHANT SHIPPING.
Company and services.
ATLANTIC OCEAN SERVICES.
Requirements.
Date of
contract.
Duration of
contract.
Annual
subvention.
Speed.
Frequency of service.
Carriage
of mails.
New Zealand Shipping Co. (Ltd.): Canadian Atlantic ports, Australia, and
New Zealand.
Close of navi-
Close of navi-
$140,000.00
10 knots..
Monthly
Mails free.
•
gation, 1913.
gation, 1915.
Allan Line Steamship Co. (Ltd.), Canadian Northern Steamships (Ltd.),
Canadian Pacific Ry. (Ltd.), and Ocean Steam Navigation Co. (Ltd.):
Canada and Great Britain.
May
1, 1914
Apr. 30, 1915
1,000,000.00
1,000,000.00 16 to 19 knots.. 2 weekly, winter; 3 weekly,
Do.
summer.
Elder, Dempster & Co. (Ltd.): Canada and Cuba (not renewed).
Reid Newfoundland Co. (Ltd.): Canada and Newfoundland
Royal Mail Steam Packet Co.: Canada, West Indies, and South America..
Elder Dempster Shipping (Ltd.): Canada and South Africa.
Furness, Withy & Co. (Ltd.): Halifax, St. Johns, Newfoundland, and Liv-
erpool.
May
Apr.
1, 1912
Mar. 31, 1913
a 1,250.00
10 knots..
Monthly
Do.
1,1913
1,1913
Mar. 31,1916
70,000.00 | Not stated
Daily except Sunday
Do.
Sept. 11, 1913
Oct. 31, 1918
340,666.66
Oct. 1,1913
Sopt. 30, 1916
11 knots.
146,000.00 10 knots....
Biweekly
Do.
Monthly
Do.
..
Apr. 1,1914
1,1914
Mar. 31,1915
20,000.00
.do.....
Once in 17 days.
Do.
Manchester Liners (Ltd.): Canada and Manchester.
Ulster Steamship Co.: St. John, Dublin, and Belfast.
do.
..do..
35,000.00
.do..
of
Donaldson Line: St. John and Glasgow
Canadian Pacific Ry. Co.: St. John, Halifax, and London.
Furness, Withy & Co.: St. John, Halifax, and London
H. & A. Allan, Canada and France..
PACIFIC OCEAN SERVICES.
Union Steamship Co. of New Zealand (Ltd.): Canada and Australia or
New Zealand.
Aug. 1, 1911
Canadian Pacific Ry. Co.: Canada, China, and Japan....
Apr.
1,1914
Grand Trunk Pacific Ry. Co.: Prince Rupert, British Columbia, and Nov. 1, 1909 Mar. 31, 1915
Queen Charlotte Islands.
naviga-
tion, 1917.
Aug. 1, 1916
Mar. 31, 1917
|
Dec., 1914 Opening
Nov., 1914
Jan. 12, 1915
Apr. 1, 1914
Opening of
naviga-
tion, 1912.
navigation,
1915.
Apr. 30, 1915
May, 1915
Mar. 31, 1915
Opening of
@ 750.00
25,000.00 | 12 knots
€ 5, 555.55 12) knots..
a 750.00
.do..
Every 2 weeks.
..do.b.
Do.
Do.
..do..
20 round trips.
Do.
a 1,500.00
Not stated.
•
10 round trips..
Do.
Twice monthly d.
Do.
2 monthly, May to Novem-
Do.
ber.
180,502.90 Voyage,
days.f
375,000.00 | Voyage in 818
or 853 hours.g
a 200.00 Not stated.
20
Every 4 weeks.
Do.
Every 2 weeks.
Do.
2 monthly; 4 monthly 1.
Do.
Pacific Coast Steamship Co.: Victoria and San Francisco.
Apr.
1, 1914
.do.
3,000.00
do.
Weekly
Do.
Canadian Pacific Ry. Co.:
Victoria, Vancouver, way ports, and Skagway.
do
do
12,500.00
.do.
2 to 4 monthly.
Do.
Victoria and west coast Vancouver Island.
.do.
do.
5,000.00
.do
3 to 4 monthly.
Do.
Union Steamship Co. of British Columbia (Ltd.): Vancouver and north
.do.
.do.
16,800.00
.do.
2 weekly
Do.
British Columbia ports.
• Per round trip.
* Until 10 round trips had been run.
• When carrying fruit.
✔ Three monthly during fruit-shipping season.
* Per round trip at average speed of 10 knots, with $555.55 for each additional
knot. Not less than 15 nor more than 30 round trips yearly.
ƒ Deduction of £30 ($146) is made for each full period of 24 hours beyond 20
days.
Within 818 hours between Liverpool and Hongkong via Quebec and within
853 hours via Halifax or St. John.
› November to March.
i April to October.
THE BRITISH EMPIRE.
65
The character of the contract for mail service is further indicated
in the following clauses common to all contracts entered into by the
Post Office Department of Canada:¹
Proof of performance of service to be furnished.-The contractors shall fur-
nish and establish at their own expense the necessary agents required for the
efficient performance of this contract, and shall with diligence, as soon after
the completion of each voyage as may be, furnish to the Minister full and
complete copies of the manifests of the cargoes and lists of passengers carried
on each voyage, duly certified by the proper officers of customs, and also such
other documents, information, and evidence as may be reasonably required
by the Minister to show the volume, extent, and value of the trade carried
on by the said steamers, and the full performance of their part of the services,
requirements, and conditions of this contract in order to enable him to judge
as to whether the terms of this contract have been or are being fully and faith-
fully carried out and complied with within the true intent and meaning thereof,
and his decision in that respect shall be binding, final, and conclusive; and
the furnishing of such certificates, documents, and evidence as hereinbefore
specified shall be a condition precedent to the payment of the subsidy herein
provided for, or any portion thereof, and if in the opinion of the Minister all
the terms of this contract have not been fully complied with by the contractors
he may deduct from the subsidy otherwise payable such portion thereof as he
may deem fit and proper, taking into consideration all the circumstances con-
nected therewith, and the contractors shall at all times during the continuance
of this contract well and faithfully abide by and conform to all such require-
ments as may be made by the Minister with regard to the said steamers in
the performance of this contract.
Financial statements.—It is further understood and agreed that the con-
tractors whenever so required shall furnish the Minister with such financial
statement or statements as he may desire from time to time respecting all
revenues derived from and all expenditures in connection with the conduct of
the service herein provided for.
British subjects.-It is further understood and agreed by the contractors
that two-thirds of the total number of officers, engineers, stewards, crew, or
other employees whatsoever upon the steamships engaged in the performance
of the service herein contracted for shall be British subjects, but the non-
observance of this clause shall not constitute a violation of this contract in
such individual cases as may from time to time be approved by the Minister
in writing.
Equipment of steamers.-The steamers to be employed as herein specified
shall at all times during the continuance of this contract be fully seaworthy,
well officered, manned, victualed, equipped, provided, and furnished, having
regard to the service which the contractors have hereby undertaken to per-
form; and shall have ample and suitable accommodation for the passengers,
mails, and freight to be carried over the route specified, and shall at all times
carry boats and life-saving appliances in compliance with the law, and shall be
in all respects subject to the approval of the Minister.
Carriage of mails.-The contractors shall during the performance of this
contract convey on each and every trip of the steamers performing the afore-
mentioned services, both on outward and homeward voyages, all such mails as
shall be tendered to the proper officers or persons in that behalf on the said
steamers by or on behalf or under the direction of the postal authorities of
Canada, or those at the terminal port or ports of call herein referred to, and
shall deliver all such mails at their proper destinations at the terminal port or
ports of call above referred to; and the expenses of carrying such mails from
the post offices or railway stations to the steamers and from the steamers to
the post offices or railway stations at the terminal ports and at the ports of
call shall be borne by the contractors, who will be subject to all general and
special regulations now or hereafter existing during the continuance of this
contract in connection with the postal service. For the conveyance of all such
mails no payment shall be made or required over or beyond the amount of
subsidy herein mentioned or provided for.
Accommodation for mails.-The said steamers shall be provided with sufficient
and convenient accommodation and protection for all such mails, to the satis-
1 Dominion of Canada: Report of the Department of Trade and Commerce, Mar. 31, 1914,
Pt. VI, pp. 139-144.
41987°—16—————5
66
GOVERNMENT AID TO MERCHANT SHIPPING.
faction of the honorable the Postmaster General of Canada for the time being,
and the contractor shall further take all reasonable and necessary precautions
for the protection of such mails while upon the said steamers or while in the
contractor's charge or custody, from loss, damage, or injury in any way, and
the contractors shall be responsible for any loss or damage thereto caused by
negligence or want of proper care or accommodation on the part of the con-
tractors, their agents, or servants, or on the part of the officers, employees, or
crew on board the said steamers, and this without regard to any question as to
the legal liability of the Postmaster General to the owners of the articles of
mail matter contained in such mails for damage or loss sustained in transit.
Definition of term “mails.”-The expression "mails" for the purpose of this
contract shall be deemed to mean and include all boxes, bags, baskets, or
packets of or containing letters, post cards, newspapers, parcels, books, or
printed papers, and all other articles which under the post-office act and postal
regulations for the time being in force are transmissible by post in Canada,
without regard to place either of origin or destination, and also all empty bags,
empty boxes, and other receptacles, stores, and articles used or to be used in
carrying on the post-office service or which shall ordinarily be sent by or to or
from the offices.
No letters except His Majesty's mails to be carried. The contractors shall
not, nor shall any of their agents or servants or officers or crew of the said
steamers receive or permit to be received on board of the said steamers any
letters for conveyance other than those contained in His Majesty's mails, or
which are or may be privileged by law, nor the mails of any other country, ex-
cept such as are specified by the Postmaster General of Canada for the time
being.
Government officials to be carried free of charge.-The honorable the Post-
master General of Canada, or the honorable the Minister of Trade and Com-
merce for the time being, or any inspector or officer of the Post Office De-
partment, or the Department of Trade and Commerce, who may in the execu-
tion of his duty travel in the said steamers, shall be carried free of charge.
Proper accounts to be kept.-The contractors shall keep full and proper ac-
counts of and in connection with the working of this service, and shall keep
such accounts separate and distinct from any other accounts of or connected
with other branches of their business; and in any contingency which, in the
opinion of the Minister, may render such a course necessary the contractors
shall allow any officer or officers named by the Minister free access to such
accounts and all books, papers, and documents connected therewith.
Substitute for disabled steamers.-It is understood that if the said steamer
shall be by peril of the sea or other unavoidable casualty lost, destroyed, or
temporarily disabled from performing the voyages herein agreed to be performed
according to the true intent and meaning of these presents. the contractors may
in such case, as soon as reasonably may be, having regard to the circum-
stances, replace the said steamer by another of equal class, speed, equipment,
character, and capacity to the satisfaction and approval of the Minister in case
the said steamer has been only temporarily disabled, and continue the service
herein contracted for with such substituted or repaired steamer with as little
delay as possible under all circumstances.
Freight and passenger tariffs-Proof of performance of service to be fur-
nished. The contractors shall carry on each steamer running under this con-
tract, according to its capacity, on all voyages, all the freight and passengers
which may be reasonably offered or obtained, and at tariff rates, both as to
passengers and freight, which may be from time to time approved by the
Minister; and the contractors shall furnish to the Minister such documents.
information, and evidence as may be required by the Minister to show the
volume, extent, and value of the trade carried on by the said steamer, and
such customs certificates, documents, and evidence as may be necessary or as
may be required by the Minister to prove the performance of the service herein
contracted for, and to enable the Minister to judge as to whether this contract
is being carefully and faithfully carried out and performed, and the furnishing
of such certificates, documents, information, and evidence, as hereinbefore
specified, shall be a condition precedent to the payment of the subsidy herein
provided for or any portion thereof.
Deductions from subsidy-Timc-tables to be furnished-Docking disabled
steamers.—Provided, however, that it is the true intent and meaning of these
presents that no amount or installment of subsidy shall be payable or be paid
at any time unless it appears to the satisfaction of the Minister that up to
THE BRITISH EMPIRE.
67
the time of such installment becoming due, as herein stipulated, the service
herein described and defined has been fully and faithfully performed, and that
all provisions and stipulations as to freight and freight rates and dates of
suiling have been in all respects faithfully observed and carried out, accord-
ing to the true intent and meaning of these presents; and it is understood and
agreed to be a further condition of these presents that the contractors shall, at
least two weeks prior to the first sailing under his contract, furnish to the
Minister time-tables showing the proposed sailings, and upon the same being ap-
proved by the Minister they shall be duly advertised in such manner as he may
direct; and it is also agreed that in case either of the steamers herein named, or
a substituted steamer sanctioned by the Minister, does not sail from a terminal
port as herein specified within
of the date fixed by such time-tables
there shall be deducted from the amount of subsidy payable for such voyage
a sum equal to one-tenth of the amount otherwise payable for the performance
of such voyage, and so in proportion for further delays or failure to sail from
such terminal port: Provided, however, That the Minister may authorize any
vessel to sail either at an earlier or a later date than that specified in such
time-tables should he for any reason deem it advisable to do so, it being
understood and agreed that, in the event of any of the said steamers being at
any time so disabled as to be obliged to be docked for repairs, the failure to
perform the terms of this contract owing to such accident and for the time
reasonably occupied in the repair of the damaged steamer shall not be taken
as a default or breach of the stipulations of this contract or subject the con-
tractors to deductions as above from the amount of the subsidy, if any, payable
for any voyage delayed in consequence of such docking for repairs, but there
shall be no claim for nor payment of any subsidy in respect of any voyage not
actually performed.
Freight and passenger rates to be approved by the Minister.-The contractors
shall, at least three weeks prior to the first sailing under this contract, furnish
to the Minister a schedule of the freight rates proposed, which schedule shall
be subject to the approval of the Minister, and after being approved by him
shall not be changed, except with his consent; and the Minister may at any
time, if he deem it advisable, fix the maximum rátes to be charged between the
different ports, on both east and west bound trips, on any article or class of
goods, and the contractors shall carry between the ports hereinbefore named,
on all voyages of the said steamships employed under the terms of this con-
tract, all passengers or freight that may be offered or that can reasonably be
procured at rates which shall not be in excess of such maximum rates as fixed
by the Minister, should he deem it advisable to so fix such maximum rates, and
in no case shall any discrimination be made as regards rates, or otherwise,
directly or indirectly, against Canadian merchants or shippers, who shall
always have precedence for their freight and goods over all other merchants
and shippers; and it is agreed and understood that the freight rates on east-
bound trips, sailing from
as hereinbefore provided, on through
bills of lading to
or
from any place in the Provinces of Ontario and Quebec,
or from any Canadian points farther west, shall in no case be greater than
from the same place to
via any United States route or port; and on
westbound trips the rates from
to any place in Ontario or Quebec, or
other Canadian points farther west, shall be as favorable as via any United
States route or port to the same place; and it is further understood and agreed
that the said steamers shall not carry between the ports of
or
and
aforesaid, on any voyage run under the terms of this contract,
either deals or lumber or timber to a greater extent than 50 per cent of the
total quantity of the cargo carried on such voyage, and such quantity only
in case other Canadian products are not offering or can not be obtained. Pro-
vided, however, that in the event of other cargo not being obtainable, satisfac-
tory evidence of the fact being furnished to the Minister, then the contractors
shall be allowed to make up the balance of the cargo with deals, boards, or
timber.
Calls at foreign ports.-The steamer employed in carrying out the provisions
of this contract shall not on any of its trips call at any foreign port not speci-
fied in this contract.
Carrying of nitroglycerin or dangerous articles.-The contractor shall not
convey o permit to be conveyed in any steamer while employed in this service
any nitroglycerin or any other article which in the opinion of the Minister shall
be considered dangerous.
68
GOVERNMENT AID TO MERCHANT SHIPPING.
Subsidy subject to vote of Canadian Parliament.—It is conditioned, declared,
and agreed that the payment of subsidy, as hereinbefore stipulated, is subject
to the amount specified being provided for the purpose by a vote of the Par-
liament of Canada, and that if no amount is voted for the purpose, or if any
amount voted has become exhausted in payment thereof, and no further sun
is voted for the purpose, this contract or agreement shall terminate and be-
come void and of no effect, and the party of the first part shall not in conse-
quence be held liable to damage.
Minister's right to terminate contract.-It is declared to be the true intent
and meaning of these presents that the Minister skal have the right at any
time during the continuance of this contract, uoon 30 days' notice in writing
to the contractors, their successors, or assigns, to terminate this contract, and
every matter and thing herein contained, if it shall appear to the Minister that
there has been any breach on the part of the contractors, their sucessors, or
assigns of any of the covenants, agreements, stipulations, or provisions herein
contained and entered into on the part of the contractors; and it is declared
and agreed that the Minister shall at all times be the sole and final judge as to
whether there has been any such breach, and his decision shall be absolute,
final, and conclusive.
Assignment of contract.-This contract shall not, nor shall any right or in-
terest therein, be assigned without the consent in writing of the Minister to
such assignment having been first obtained..
Canadian members of Parliament not admitted to share in contract.-It is
a condition of these presents that no member of the House of Commons of
Canada shall be admitted to any share or part of this contract or agreement
nor to any benefit to arise therefrom.
Changes in contract.-The Minister may authorize any change or changes in
the terms of this contract as may not be inconsistent with the vote providing
for the payment of the subsidy.
Minister to be final judge as to full carriage out of contract.-The Minister
shall at all times be the judge as to whether the terms of this contract have
been or are being fully and faithfully carried out and complied with within
the true intent and meaning thereof, and his decision in that respect shall be
binding, final, and conclusive.
Transportation of trade commissioners.—(Inserted for contracts for ocean
services.) The Canadian trade commissioners and their wives, children, and
servants, or Canadian commercial agents, shall be granted free transportation,
meals included, with first-class accommodation and free transportation for their
household effects, upon any steamships employed by the contractors in the per-
formance of this contract when requested so to do by the Minister, and when
the said commissioner or commercial agent is traveling upon his official duties
or being transferred from one official post to another.
Intercolonial Railway clause.-(Inserted in contracts for Atlantic Ocean
services.) It is hereby agreed by the contractors that as the aid herein
expressed and provided for by the Canadian Government is for the express
purpose of encouraging the development of Canadian trade and the transporta-
tion of Canadian goods through Canadian channels, the company accepts the
aid on these conditions and agrees that all freight booked or carried by the
said steamships from a port in the United Kingdom and during the time these
make Halifax or St. John their terminal port, shall, when not otherwise
expressly routed by shippers or consignees, be delivered to the Intercolonial
Railway at Halifax or St. John for shipment to final destination in Canada,
provided that the rates demanded by the Intercolonial Railway shall not be in
excess of the rates charged by any other railway company from said ports to
final destination in Canada.
(a) Contractors are to hand over to the Intercolonial Railway at Halifax
passengers for points in the Maritime Provinces or the Province of Quebec,
providing the route of such passengers is controlled by the contractors and that
they are not otherwise routed. It is further agreed that the contractors,
through their agents in Canada, shall see that they have all such freight, for
export as may be secured by them for a port in the United Kingdom at which
the subsidized line may call delivered to the Intercolonial Railway at Montreal.
Calls at Government wharves.—(Inserted in contracts for local services).
In consideration of the subsidy herein stipulated the contractors agree to call
at all Government wharves when such is practicable and when such wharves
are available.
THE BRITISH EMPIRE.
69
Handling of perishable products.-(Inserted in contracts for Atlantic Ocean
services.) The andling, loading, stowing, and unloading of any fruit or per-
ishable products carried by the said vessels shall be subject to and under the
supervision of any cargo inspector or other officer appointed for that purpose,
should the Minister of Agriculture for Canada deem it advisable.
In addition to the above clauses to be found in every contract there
are in certain cases special requirements; for example, the contracts
with the Allan Line, the Canadian Pacific Railway Co., and other
lines for mail service between Canada and Great Britain contain
the requirement that passenger fares and freight rates from Canada
to ports in the United Kingdom shall not exceed the rates from
New York to the same ports on vessels of a similar class, and that
there shall be no discrimination against Canadian merchants or
shippers or against immigrants to Canada or against any Canadian
port.
The contract with the Royal Mail Steam Packet Co. for service
between Canada and the West Indies contains the following special
requirements:1
The contractors are required, at their own expense, when so required by
consignors, to pay the freight charges by rail from St. John to Halifax on
butter, cheese, and fruit intended for shipment by the contractors' steamships.
The contractors must use their utmost endeavor to develop the cargo and
passenger trade between Canada and the British West Indies by means of
reasonable advertising and regular solicitation through agents.
The contractors must use their best endeavors to arrange through rates of
freight between inland points in Canada and the various ports of call referred
to in this contract in the British West Indies and Central and South America.
No discrimination of any kind as regards freight and passenger rates may
be made in favor of any merchant, shipper, or importer in any one of the British
colonies referred to herein, as against any other merchant, shipper, or importer
in the same colony.
Through bills of lading must be issued from any Canadian point of shipment
to any port in Central or South America which is a regular port of call for any
of the steamships employed or controlled by the contractors on other services,
and which make regular connections with the service herein contracted for.
In the contract with the Manchester Liners (Ltd.) for service
between Canada and Manchester a special requirement is to be
found to the effect that freight rates shall not exceed the rates
current on other vessels or lines, less the rates charged or chargeable
by the Manchester Ship Canal Co. for the use of or towage through
that canal.
A special requirement as to rates is to be found also in the Cana-
dian Pacific Railway contract for service between St. John, Hali-
fax, and London, which provides that freight rates from London
to Halifax shall in no case be greater than those from London to
St. John.
The contract with the Union Steamship Co., of New Zealand
(Ltd.), contains the following requirement:2
No discrimination as regards freight or passenger rates is to be made against
Canadian ports, railways, merchants, or shippers. Canadian merchants and
shippers are to have preference at all times for the carriage of their goods
over other merchants and shippers, as far as regards the Canadian connec-
tion.
1 Dominion of Canada: Report of the Department of Trade and Commerce, Mar. 31, 1914,
l't. VI, p. 21.
* Idem, p 45.
70
GOVERNMENT AID TO MERCHANT SHIPPING.
A somewhat similar requirement is to be found in the contract
with the Canadian Pacific Railway Co. for service between Canada,
China, and Japan, one clause of this contract providing as fol-
lows: 1
No toll or rate for either passengers or freight shall be charged which dis-
criminates against Canadian passengers, merchants, or shippers, or against
one or more of the Canadian ports on the Pacific Ocean, nor shall such rates
for either passengers or freight be in excess of the rates charged on steam-
ships of a similar class from United States ports on the Pacific coast.
This contract is rather stringent in regard to time of sailings,
and deduction of $1,500 is made if a mail steamship fails to put to
sea from Liverpool or Hongkong at the appointed day and hour,
with a further deduction of $500 for every successive 24 hours' de-
lay. A deduction of $500 is made for every 12 hours in excess of
the stipulated running time between Liverpool and Hongkong. It
should be noted, however, that where the delay or default is due
to any cause altogether beyond the control of the company no de-
duction is made.
The contract of H. & A. Allan for service between Canada and
France specifies that three of seven designated boats owned by the
contractors shall be used in this service, but two of these ships can
be employed only with the consent of the Minister, and then only
during the season of closed navigation on the St. Lawrence River.
The Allan contract is unique also in that the amount of payment
varies with the average speed. The payment amounts to $5,555.55
for each round voyage completed at an average speed of 10 knots
with an extra payment of $555.55 for each knot in excess of 10.
It is further required that the average speed of all the steamships
engaged in the service in any one year shall be not less than 121
knots and at the conclusion of each year's service if this average has
not been attained there shall be a pro rata deduction in the total
authorized subsidy for the year of $555.55 per knot for each knot
less than the minimum average speed of 12 knots.
From the table on page 62 it will be seen that a considerable por-
tion of the mail subventions and subsidies are for local service.
For the fiscal year 1915-16 44 contracts, calling for the expenditure
of $309,925, were entered into for local service. In many cases
the subvention is small and calls for the free carriage of mail. It
will be noted further that the routes are in the thinly populated
districts of Canada. It is reasonable to assume, therefore, that pay-
ments for local services are not primarily for the development of
the merchant marine but are almost exclusively for maintenance of
postal routes and communication between scattered and remote sec-
tions of the Dominion.
AUSTRALIA.
The history of shipping subsidies in Australia is concisely and
fully described in the following extract from the Official Year Book
of the Commowealth of Australia for 1901-1913, pages 665-670:
Regular steamship communication between Australia and Europe was estab-
lished in 1852 by a service run by the Peninsular & Oriental Co. between Singa-
pore and Sydney, via King Georges Sound, Adelaide, and Melbourne. This
1 Dominion of Canada: Report of the Department of Trade and Commerce, Mar. 31,
1914, Pt. VI, pp. 48-49.
THE BRITISH EMPIRE.
71
t.
service was inaugurated in September, 1852, by the arrival at Melbourne of the
Chusan and was continued until 1854, when it was stopped in consequence of the
Crimean War; in 1856 a line of steamers was again started, and the service was
carried on by the Peninsular & Oriental Co., in conjunction with the Royal
Mail Co., for some years.
(I) Mail route via San Francisco. The service via the Red Sea did not at
that time give much satisfaction to the public and was looked upon with a cer-
tain amount of disfavor in New South Wales and New Zealand. The effect was
to stimulate the colonists to agitate for an improved service, and proposals were
made for the establishment of a line of mail packets from Sydney to Panama
via Wellington, by rail across the isthmus, and thence to Great Britain. The
result was that in 1866 the line was started, and continued in operation until
the end of 1868, when it was terminated through the failure of the company by
which it had been carried out. The completion of the railway across the Ameri-
can continent in 1869, with its western terminus at San Francisco, opened up a
new and agreeable route, and in that year a monthly service was inaugurated by
the Union Steamship Co., in conjunction with the Pacific Steamship Co., from
Sydney to San Francisco via Auckland. This service was subsidized to the
extent of £37,000 ($1,060) per annum, of which New South Wales paid £25,750
($125,312) and New Zealand £11,250 ($54,748), and was continued until Novem-
ber, 1890, when a new contract was entered into and the amount of the subsidy
largely reduced, the amount of the contribution being based upon the weight of
mail matter carried. Various extensions of the contract were made, but the
last agreement made between the New Zealand Government and the Oceanic
Steamship Co., of San Francisco, expired on the 10th of November, 1906, and
has not since been renewed. From that date mails were carried at Postal Union
rates until the 12th of April, 1907, when the service was discontinued. At pres-
ent mails to and from Europe via San Francisco are carried by the Union Steam-
ship Co., which receives a subsidy from the New Zealand Government, and by
the Oceanic Co. Each of these companies carries Australian mails at poundage
rates, with a four-weekly service.
(II) Route via Suez Canal.-The establishment of a mail route via America
had the effect of stimulating the steamship owners who were engaged in the
service via Suez, and from that time there was a marked improvement in the
steamers, as well as in the punctuality and speed with which the mails were
delivered. The Peninsular & Oriental Co., and, at a little later date, the
Orient-Pacific Co., have carried mails to and from Australia almost since the
inception of ocean steam services. Postal matter was carried by contract until
1905, when the contract between the Peninsular & Oriental Co. and the Com-
monwealth Government ceased, although that between the company and the
Imperial Post Office is still in force. Mails are still carried from Australia
by the Peninsular & Oriental Co., but are carried at Postal Union rates and
not under contract with the Commonwealth. On the 25th of April, 1905, the
Orient-Pacific Co. concluded a new contract with the Commonwealth Govern-
ment for a fortnightly service between England and Australia. The subsidy
was at the rate of £124,880 ($607,729) per annum. This contract has now
been replaced by the new mail contract referred to in the next subsection hereof.
Fremantle has, since the year 1900, been the first and last port of call for the
mail steamers to Europe, in lieu of Albany, the original port of call. The
Peninsular & Oriental and Orient-Pacific Cos.' steamers sail alternately every
week both from London and Australia, conveying the outward and homeward
mails.
(a) The new mail contract.-On the 1st of January, 1906, tenders were
invited by the Commonwealth Postmaster General for a fortnightly mail service
between Adelaide and Brindisi, to alternate with a similar service to be pro-
vided by the Imperial Government, and a contract was entered into with Sir
James Laing & Co. (Ltd.), providing for a service at an annual subsidy of
£125,000 ($608,313). This contract, however, fell through, and new tenders
were accordingly called for. On the 15th of November, 1907, an agreement was
entered into with the Orient Steam Navigation Co. (Ltd.) providing for a
fortnightly service for a period of 10 years, commencing in February, 1910.
The mail service is to be carried out by existing vessels belonging to the com-
pany and by five new mail ships, which have been specially built, and which
are each over 12,000 tons gross registered tonnage and of not less than 17 knots
speed. Two more new vessels were to be added within 18 months and 6 years,
respectively, from February, 1910, and under this provision the Orama en-
tered into running during November, 1911. The vessels are to call at Fre-
72
GOVERNMENT AID TO MERCHANT SHIPPING.
mantle, Adelaide, Melbourne, Sydney, and Brisbane, and at least six of them
at Hobart during the months of February to May, inclusive. The voyage from
Taranto to Adelaide is to be completed within 26 days 14 hours, and from
Adelaide to Taranto within 27 days 2 hours, but the latter period may be
exceeded by 36 hours during the prevalence of the southwest monsoon. The
amount of the subsidy is fixed at £170,000 ($827,305) per annum; but, if the
earnings of the company decreased, or the expenses increased, by reason of any
Commonwealth shipping legislation passed subsequently to the date of the
agreement, to the extent of not less than £5,000 ($24,333) a year, the con-
tractors have the right to terminate the agreement unless the subsidy is in-
creased. Insulated space of not less than 2,000 tons of 40 cubic feet is to be
provided in each of the new vessels, and the freights are not to exceed 1 half-
penny per pound for butter and 60 shillings per ton for fruit. White labor
only is to be employed, and no discrimination is to be made between unionists
and nonunionists. If before or during the sixth year of the period of the con-
tract an accelerated service is provided by any competing line of mail ships,
the contractors must, if so required by the Postmaster General, provide a
service equal to the competing service, at an increased subsidy, to be determined
by agreement or arbitration. The Commonwealth flag must be flown on the
mail ships, which the Commonwealth has the right to purchase at a valua
tion at any time. Within six months of the Postmaster General establishing
a permanent wireless-telegraphy station at Rottnest Island, or at any point
on the coast between Fremantle and Brisbane, the company must fit the mail
ships with wireless-telegraphy installations. The new service was inaugurated
on the 11th of February, 1910.
(III) Route via Vancouver and Canadian Pacific Railway.-During the year
1893 a direct monthly service was started between Sydney and Vancouver, in
British Columbia, via Wellington, in New Zealand, and thence to Liverpool via
the Canadian-Pacific Railway, the New South Wales Government paying an
annual subsidy of £10,000 ($48,665) for the maintenance of this service for a
period of three years. In 1896 the agreement was renewed for a further period
of three years, and in 1899 was again renewed for four years, subject to the
same terms and conditions, except that the route was via Brisbane instead of
Wellington. The contract was further extended, at an increased subsidy, from
time to time until the 31st of July, 1911, at a subsidy of £26,626 ($129,575)
per annum. This subsidized service has now been discontinued. Mails for
Canada are forwarded via New Zealand through Sydney at poundage rates.
(IV) Other ocean mail services.—In addition to the mails via the Suez Canal
a number of other services, both regular and irregular, are maintained between
the Commonwealth and various parts of the world, and also between the prin-
cipal ports in the various States and a number of small ports in the less settled
parts of the Commonwealth which are inaccessible by rail.
Details as to the various subventioned mail services of the Common-
wealth and Provincial Governments of Australia are shown in the
following table, which has been made up from a list of the mail serv-
ices of the Commonwealth of Australia in force on June 30, 1913: "
Subventions.
Description of service.
Frequency of
service.
Route.
Amount. By whom paid.
To and from Europe via Suez:
Peninsular & Oriental b..
Fortnightly... Adelaide, Fremantle, and (c)
London via Brindisi and
Marseille.
Imperial Gov
ernment.
Orient-Pacific b
do...
To and from northern ports of
Queensland:
Australian United Steam Weekly..
Navigation Co. (Ltd.).
Do....
Adelaide, Fremantle, and $827,305 Com mon.
London via Taranto.
wealth.
Brisbane, Gladstone, Towns-
ville, Cairns, Cardwell,
Morilyan, Geraldton, Port
Douglas, and Cooktown.
Once every 3 Brisbane, Normanton, and
89,787 Queensland.
29, 199
Do.
weeks.
Burketown via Townsville,
Cooktown, and Thursday
Island.
• Official Yearbook of the Commonwealth of Australia for 1901-1913, pp. 667-670.
⚫ Mails carried also to India via Colombo.
c Mails from Australia at Postal Union rates.
THE BRITISH EMPIRE.
73
Description of service.
Frequency of
service.
Route.
Subventions.
Amount. By whom paid.
To and 'rom ports in South
Australia:
Gull Steamship Co.......
Weekly...
Port Adelaide and Kingscote..
$2,896 South Austra
lia.
Do....
Do....
Do.
Twice a week.
.do.
Weekly.
Port Adelaide and Edithburgh
Port Adelaide and Stansbury..
Port Adelaide and Port Vin-
cent.
1,455
Do.
1,455
Do.
725
Do.
Adelaide Steamship Co..
do
Port Adelaide and Port Lin-
coln.
8,419
Do.
Western Australia:
To and rom ports on
northwest coast-
State Steamship
Service.
Do...
To and from ports on
south coast-
State Steamship
Tasmania:
Service......
Do....
Do.......
Union Steamship Co. and
Huddart Parker Pro-
prietary.
Do...
Huon Channel & Penin-
sula Steamship Co.
(Ltd.).
Holyman & Sons (Ltd.)..
Do.......
Monthly.
Fremantle and Derby...
26,766
Bimonthly....
Fremantle and Darwin.
Western Aus-
tralia.
Weekly
Fortnightly
Quarterly..
Albany and Esperance..
Albany and Israelite Bay.
Albany and Eucla..
15, 816
[C o'm m on.
wealth.
3 times a week.
Melbourne and Launceston....
63,265
Do.
Twice a week. Melbourne and Burnie..
(Hobart and Tasmania.
Peninsula ports....
do.
1,241
Do.
.do.
Hobart and Maria Island.
122.
Do.
Launceston and
Furneaux
1,217
Tasmanian
Government
Thrice weekly.
do.......
group of islands.
Launceston and King Island..
Common -
1,217
wealth.
1,460
Do.
4 times a year..
7,494
Do.
Every 8 weeks.
a 730
Do.
(b)
New
Wales.
South
Stephenson & Gunn..
To and from northern terri-
tory:
Jolly & Co...
Do...
To eastern ports:
Burns, Philp & Co....... Monthly...
Pacific islands:
Burns, Philp & Co……..
Do.
Do....
Do...
·
..do.
2
Every
months.
Every 6 weeks.
a Per voyage.
do...
Darwin and Boroloola, calling
half yearly at Roper River.
Darwin and Wyndham..
Sydney, Sourabaya, Sama-
rang, Batavia, and Singa-
pore.
Sydney to Lord Howe and
Norfolk Islands, North
Hebrides.
Sydney to Gilbert and Mar-
shall Islands.
Papua..
Solomon Islands.
96, 600 Common-
wealth.
b Mails carried at pound rates.
Western Australia. The above table brings out clearly the fact
that several of the States of the Commonwealth, as well as the Fed-
eral Government itself, pay subventions to steamship lines. It will
also be noted that Western Australia pays subventions to the State
Steamship Service. This service was established by Western Aus-
tralia in 1913 to retain the steamship service along the south coast
which was about to be discontinued by the Commonwealth Govern-
ment because of the excessive financial aid demanded by the private
company that formerly operated the line.
In further reference to the service that is now maintained by the
State of Western Australia. the following extract from an unpub-
lished monograph prepared in January, 1916, by the Legislative
Reference Division of the Library of Congress will be of interest:
No formal act establishing the service was enacted, but a provision of the
loan act of 1912 (3 Geo. V, No. 50 of 1912) allowing, under "Other State
74
GOVERNMENT AID TO MERCHANT SHIPPING.
undertakings," £100,000 ($486,650) for "steamships," and an item of the
appropriation act of 1912-13 (3 Geo. V, No. 68 of 1912) granting £897 7s. 2d.
($4,367) for the "Government steamship service," gave authority for the under-
taking.
Four vessels have been put in operation at an initial cost of £105,634 2s. 4d.
($514,068). Two of the ships are engaged in cattle trade between the southern
and northwestern markets, one in mail and passenger service to the south coast,
and one in carrying fish for the State fish supply.
The service is operated as a department of State under the Colonial Secre-
tary, practical administration being in the hands of the manager, who has
wide discretionary powers. His decisions are subject to the approval of the
Minister.
The fleet of the Western Australian Government steamship service comprises
four vessels:¹ The Western Australia, 3,000 tons, twin screw, 18 knots, fitted
with wireless and refrigerated space; capacity, 400 bullocks or 6,000 sheep. The
Kwinana, 3,000 tons, capacity 700 bullocks or 10,000 sheep; the Eucla, 564 tons,
11 knots; the Una, 150 tons.
The authorizing act' for this service made provision for a £1,000,000 loan
($4,866,500).
NEW ZEALAND.
The Government of New Zealand has paid postal subventions since
1869, when a contract was entered into between New Zealand and
New South Wales on the one hand and the Union Steamship Co. and
the Pacific Steamship Co. on the other. The contract provided for
a monthly service between Sydney and San Francisco via Auckland
and was made primarily to facilitate the dispatch of the colonial
mails to and from England, the use of the newly completed transcon-
tinental railroads in the United States shortening the time con-
siderably.
The subvention amounted to £37,000 ($180,060) per year, of which
New South Wales paid £25,750 ($125,312) and New Zealand £11,250)
($54,748), and was continued until November, 1890, when a new
contract was entered into and the amount of the subsidy largely
reduced, the amount being based upon the weight of mail carried.
Various changes were made in this contract but the last contract
between the New Zealand Government and the Oceanic Steamship
Co., an American line, terminated on November 10, 1906. From that
time until April 12, 1907, this company carried the mails at Postal
Union rates.
In 1907 the New Zealand Government entered into a mail subven-
tion agreement with the Union Steamship Co., a New Zealand cor-
poration, for a monthly service between Sydney, Wellington, and
San Francisco.
UNION OF SOUTH AFRICA.
For many years prior to the formation of the Union of South
Africa, Cape Colony entered into a contract with the Union Castle
Mail Steamship Co. for a weekly service of steamers between Cape
Town and Southampton. The present contract, made in 1912 and
running until 1922, provides for an annual subvention of £171,000
($832,172). An average speed of 16 knots per hour is required of
the steamers operated on this line.
¹ Statement by Premier of Western Australia.
3 Geo. V, No. 50 of 1912.
THE BRITISH EMPIRE.
75
JAMAICA.
On February 16, 1901, the Elder-Dempster Line instituted a new
and subsidized service between Bristol, England, and the island of
Jamaica, under a contract which lapsed in February, 1911. The
purpose of this line was primarily commercial, for it was intended
to stimulate the exportation of the agricultural products of Jamaica,
such as bananas, cacao, etc. The Elder-Dempster Co. received a
yearly subsidy of £40,000 ($194,660), one-half of the subsidy being
paid by the British Government and the remainder by the Jamaican
Government. The company was required to operate a fortnightly
service with boats of at least 15 knots speed, to carry to England
on every voyage at least 20,000 bunches of bananas, and to carry the
Government mail free of charge.
OTHER BRITISH POSSESSIONS.
Of the total subvention of £62,900 ($306,103) paid to the Royal
Mail Steam Packet Co. in the fiscal year 1912-13, the colonies
of Barbados, British Guiana, and Trinidad contributed £3,667,
£2,700, and £16,300, respectively, or a total of £22,667 ($110,309).
The Falkland Islands contribute £2,500 ($12,166) toward the total
subvention of £32,000 ($155,728) paid the Pacific Steam Naviga-
tion Co.
India contributes £54,588 ($265,653), Ceylon £4,852 ($23,612), the
Straits Settlements £6,475 ($31,511), and Hongkong £10,673 ($51,-
940), or a total of £76,588 ($372,716), toward the subvention of
£305,000 ($1,484,283) which the Peninsular & Oriental Steam Navi-
gation Co. receives for its Far Eastern services.
The West African possessions of the British Empire, including
Gambia, Gold Coast, North Nigeria, South Nigeria, and Sierra
Leone pay £4,995 ($24,308), or nearly one-third of the £15,365 ($74,-
725) received by the African Steamship Co. and the British &
African Steam Navigation Co. for the maintenance of a semiweekly
service.
Chapter III.-GERMANY AND AUSTRIA-HUNGARY.
GERMANY.
In total tonnage the merchant marine of Germany ranks third
among the marine navies of the world, only those of Great Britain
and the United States being greater. In point of tonnage engaged
in over-seas trade Germany far outranks the United States, the bulk
of whose shipping is engaged in the coasting trade and in traffic
on the Great Lakes.
The rapid development of the merchant shipping of Germany,
like the industrial and commercial development of that country, is
largely a matter of the past 45 years. The expansion of the indus-
tries, the over-seas trade, and the shipping of Germany have gone
hand in hand, each being so organized as to contribute largely to the
development of the other. There is perhaps no better illustration
than this of the German system of efficient coordination of re-
sources.
Over-seas shipping is not, however, a new interest for Germany,
for the German City-States of Hamburg, Bremen, and Lubeck were
among the main centers of the Hanseatic League, which dominated
the commerce of the Baltic and the North Seas as well as of the
rest of Europe for several centuries following the opening of the
trade routes to the Far East at the time of the Crusades. The
traditions of those early days have never ceased, and Hamburg,
Bremen, and Lubeck are still independent City-States and still pri-
marily interested in shipping.
The wide extent of ocean shipping under the German flag is,
however, a new development and is to be accounted for by a number
of factors, among which are the following:
(1) Expansion of the foreign trade of Germany.
(2) Control of much of the emigrant traffic to the United States.
(3) Ability to produce iron and steel cheaply.
4) Development of the shipbuilding industry by reason of (a)
low cost of iron and steel; (b) free admission of raw materials for
ship construction; (c) low railroad freights on materials shipped
from interior points in Germany; (d) naval contracts; (e) prefer-
ence in the construction of vessels for subsidized lines.
(5) Effective coordination of services so as to avoid duplication
of routes. German steamship lines are not only permitted but are
encouraged to enter into pooling agreements for the maintenance of
rates, the division of territory, and the payment of deferred rebates.
(6) Judicious subventions.
(7) Preferential railway rates on goods shipped via specified
steamship lines.
It will be observed that in the above list of factors accounting
for the development of the German merchant marine, the factor of
direct Government aid has been assigned an inferior place. The
76
GERMANY AND AUSTRIA-HUNGARY.
77
fact of the matter is that the remarkable development of the Ger-
man merchant marine is due in only a small degree to direct Gov-
ernment assistance. This has been clearly stated by Dr. Meeker in
his History of Shipping Subsidies in the following terms: 1
A certain class of people in England and especially in the United States
read the evidences of Germany's progress in shipping, and, by means of a
process which it would be flattery to call reasoning, they conclude that this
progress is due to enormous subsidies paid by Germany. There is only one
sufficient answer to this assertion. It is absolutely false. First, as we have
seen, Germany does not pay large subsidies. Though the contracts are not
let at public auction, the Government takes good care of its end of the bargain,
and requires good service for moderate pay. In relation to miles traveled
the German service is cheaper than the English, though in relation to the
quantity of mails it is considerably dearer; secondly, no possible connection
between the postal subventions and the growth of the marine can be estab-
lished. The North German Lloyd and the Hamburg-Amerika Line owe their
great success to the emigrant movement to the United States. It is scarcely
necessary to mention the great industrial revolution in Germany since 1880 to
prove that the growth of German shipping is entirely independent of official
tinkering. As to the indirect bounties, their influence can hardly account for
any considerable part of the rapid development of German shipping and
commerce.
Statistics showing the development of the German merchant
marine are given in the following table, which shows the actual
and potential net tonnage of German shipping at the beginning of
each five-year period from 1870 to 1905 and for each year from
1910 to 1912:
1870.
1875....
1880..
1885..
1890.
1895...
1900..
1905....
1910...
1911..
1912.
Actual net tonnage.b
Year."
Total.
Sail.c
Steam.
Potential
net
tonnage.d
982, 355
900, 361
81,994
1,084, 882
1, 146, 343
901, 313
183,569
1,181, 525
1,452, 020
965, 767
215, 758
1,282, 449
1,613, 041
861, 844
420, 605
2,123, 659
1, 433, 413
709, 761
723, 652
2, 880, 717
1,502, 044
622, 105
879, 939
3,261, 922
1,941, 645
593, 770
1,347, 875
4,637, 395
2,469, 292
553, 817
1,915, 475
6,300, 242
2,903, 570
533, 652
2,256, 783
,304, 001
3,023, 725
510, 059
2,513, 666
8,051, 057
3, 153, 724
498, 228
2,655, 496
8, 464, 716
a On Dec. 31.
Includes vessels of 17.5 tons and over.
c Includes seagoing barges.
d Computed on the theory that 1 ton of steam tonnage equals 3 tons of sail tonnage.
The German merchant marine has developed rapidly since 1890.
There was apparently a decline in tonnage in the years 1896 and
1897, but this was due solely to the fact that on July 1, 1895,
there came into operation a new ship measurement law, as a result
of which the net tonnage of steamships was reduced about 18 per
cent and the tonnage of sailing vessels about 4 per cent.
Prior to 1890 the increase in total tonnage was not large, the in-
crease during the period from 1875 to 1890 amounting to 348,531 net
tons, or 32.1 per cent. It should be noted, however, that during this
period the net tonnage of steamships increased from 183,569 to
723,652, while the tonnage of sailing ships declined from 901,313 to
709,761.
1 Meeker: History of Shipping Subsidies, 1905, p. 93.
78
GOVERNMENT AID TO MERCHANT SHIPPING.
i
Since 1890 the development of the German merchant narine has
been remarkable. The total net tonnage on December 31, 1890, was
1,433,413, while on December 31, 1912, it was 3,153,724. During this
period the tonnage of steamships increased nearly 270 per cent, while
the tonnage of sailing vessels showed a slow and steady decline.
The increase in the tonnage of the German merchant marine in
recent years has taken place exclusively in the North Sea district,
the tonnage in the Baltic Sea being much less than it was 25 years
ago, although there has been an increase since the year 1901 In
the year 1888 the tonnage of ships in the North Sea constituted
71.6 per cent of the total tonnage of the German merchant marine,
while on January 1, 1912, the proportion was 89.5 per cent.
The decline in the tonnage of the Baltic Sea shipping is due
largely to the practical elimination of sailing ships in that trade,
steamships having increased steadily. The decline in sailing tonnage
in the North Sea trade has been comparatively slow. This is due
largely to the fact that in the last two decades seagoing barges have
been used to an increasing extent in the North Sea trade and that
this class of ships is included with sailing ships in the classification
of tonnage.
INDIRECT AID.
Reservation of coasting trade.-The German seacoast is of con-
paratively small extent and offers little support for the develop-
ment of a merchant marine. The highly developed system of canals
and railroads in Germany affords, on the whole, a more direct and
efficient means of transportation between points located along the
seaboard than is possible on the North and Baltic Seas, although
the Kaiser Wilhelm (or Kiel) Canal shortens by hundreds of miles
the journey between points on the North Sea and the Baltic Sea, and
has done much to improve the coasting trade.
Exemption from import duties.-Germany has long pursued the
policy of granting free admission to foreign-built seagoing vessels
and to foreign-built vessels, other than pleasure craft, for naviga-
tion on rivers and lakes, and this policy is still pursued, although
the domestic shipbuilding industry has developed greatly and is able
to turn out the tonnage demanded by German shipping interests.
Although there is no general requirement that ships seeking regis-
try in Germany must be built in German yards, it is, nevertheless,
required that the vessels of subventioned lines must be of domestic
construction. For example, article 13 of the mail subvention con-
tract with the North German Lloyd entered into on October 30,
1898, contained the following stipulation:
The new steamers to be placed in service on these lines shall be built in
German shipyards and of German materials as far as possible. When ex-
tensive repairs have to be made they, too, shall be made in German shipyards
as far as practicable.
A similar clause was inserted in article 12 of the contract of July
21, 1900, with the German East Africa Line.
It has been estimated that in the decade 1885-1894 the North
German Lloyd received an aggregate sum of 59,000,000 marks
($14,042,000) in subventions, but paid to German shipyards 60,000,-
000 marks ($14,280,000) for new construction and repairs.
GERMANY AND AUSTRIA-HUNGARY.
79
Another advantage enjoyed by German shipbuilders is the privi
lege of importing, free of duty, foreign materials required for the
construction, equipment, or repair of vessels, other than pleasure
craft, for use on the high seas, rivers, or lakes.
The policy of granting preferential railway rates on shipbuilding
materials transported from the interior section of Germany has also
been of marked benefit to the German shipyards. This policy was
instituted in October, 1885, and provides for a reduced rate for the
transportation by rail of raw and manufactured materials used in
shipbuilding, such as steel plates, angle bars, rivets, bolts, chains,
anchors, etc., shipped from the great centers of the iron and steel
industry on the Rhine to the shipyards at Hamburg and Bremer-
haven. This preferential rate has been calculated at 1.7 pfennigs
per metric ton-kilometer (0.664 cent per ton-mile), as against 3.5
to 4.5 pfennigs (1.37 to 1.76 cents) in the ordinary tariff.
The commercial patriotism of the German shipowner is given by
a French writer, M. Gerville-Réache, as another cause for the ex-
pansion of the shipbuilding industry of Germany. This authority
says:
1
The German shipowner gives preference to German shipyards, and the latter
again to German manufacturers, even if the domestic prices are higher. It is
to this maritime patriotism that the astonishing progress of the German mer-
chant marine is partly due.
Preferential railway rates. In addition to the reduced rates
granted by the State Railways for the transportation of shipbuild-
ing materials from the Rhine and other districts to the great ship-
yards at Hamburg and Bremerhaven, the State Railways offer
special reduced rail rates on practically all export commodities
shipped on through bills of lading. Similar special rates are offered
in the United States, Belgium, Denmark, and Holland. While the
primary purpose of the lower rate for export shipments is to place
manufacturers in the interior sections of Germany in a more favor-
able position to compete with manufacturers of other countries who
are nearer the seaboard, nevertheless it contributes as much perhaps
to the expansion of German shipping as to the increase in German
foreign trade.
A special form of preferential railway rates was introduced on June
15, 1890, when the German Levant Line was established and was used
again on April 1, 1915, in the case of the German East Africa Line.
Goods exported from interior points in Germany on through bills.
of lading either to the Levant or to East Africa via these lines are
granted largely reduced transportation rates on the German State
Railways. The railway portions of these through rates are said to
be much lower than those applied to goods sent to German ports for
exportation by sea to other sections.
The rates given in the tariff of the Levant Line are based upon
the arrangement of this company with the German Government for
carrying exports from the interior of Germany to the ports of the
Levant (excepting Tunis and Tripoli), including Malta. Alexandria,
Piræus, Smyrna, all the important ports of Turkey, Bulgaria, Rou-
mania (and various stations of the Turkish and Bulgarian Railway),
and all ports on the Black Sea. Besides being favored by the
1 La Marine Marchande en France et en Allemagne, Subventions et Primes. p. 93.
80
GOVERNMENT AID TO MERCHANT SHIPPING.
1
reduced sea freights of the Levant Line and the German State Rail-
ways, goods sent by this company's steamers on through bills of
lading are allowed also reduced rates of transportation on the
Turkish and Bulgarian lines, if destined for stations thereon.
The manner in which these two lines have been developed, largely
as a result of preferential railway rates, is described in the follow-
ing extract, from the treatise of M. Dussol on "Les grandes com-
pagnies de navigation et les chantiers de construction maritimes en
Allemagne," which also gives details as to the special arrangements
for handling goods consigned to points in the Levant and along the
East African coast:
The German Levant Line does not receive a financial subsidy from the State.
In an indirect way, however, the company receives substantial aid from the
State in the form of through tariffs for transportation by rail and sea. Ger-
man merchandise intended for transportation by steamers of the company is
carried from interior points to Hamburg at reduced rates. As soon as the
company was organized, the Government came to its aid in this way, the ar-
rangement being easily accomplished, as the railways are owned by the Govern-
ment. The advantages to the company are twofold: Receiving no financial
subsidy, the company is not bound by onerous conditions, and consequently
retains a certain freedom of action, while reduced rates bring it an abundance
of freight from all parts of Germany. The German East Africa Line is sub-
sidized in the same way.
This method naturally stimulates exportation for it is the merchandise, and
not the ship, that is subsidized. Direct ship subsidies benefit shipowners but
do not result in a corresponding reduction of freight rates, while special through
tariffs virtually provide an export bounty in the form of a freight reduction.
The liability of the railway ends with the delivery of the goods at Hamburg
and their acceptance by the steamship company, which then assumes the re-
sponsibility for the further transportation of the goods.
Goods may be sent at the reduced rates from stations included in specified
traffic districts (the Deutscher Levante-Verkehr or the Deutscher Ost-Afrika-
Verkehr).
If, however, the goods are sent from a station not included in the particular
district, regular rates are charged only to the nearest station within the
"Verkehr" and reduced rates from that station to Hamburg.
Goods shipped to Levantine or East African ports may be consigned to a
specific person or firm, or shipped "for orders." Only the shipper whose name
appears in the bill of lading can dispose of the goods. Merchandise can not be
shipped for orders unless all the goods forming a carload are to go by one
steamer. The goods must be accompanied by statistical and other documents
required by the customs administration; if the goods are shipped for orders.
individual documents must be made out for each port of destination. Bills
of lading for goods shipped for orders are delivered to the shipper; those for
goods consigned to specific persons, to the consignees. The companies do not
deliver bills of lading to third parties.
The freight charges for goods shipped for orders and for certain specified
articles must be paid in advance. Where the freight charges are not paid
before sailing, an additional charge of 2 per cent is made for cost of collection.
The company undertakes to pay for the insurance of the goods against the
perils of transportation by land and sea in accordance with a scale attached to
the freight tariff, provided the value of the goods be stated in the bill of lading.
The system of through tariffs aims to reduce to a minimum the railway
freight rates for goods shipped via the German Levant Line or the East Africa
Line. The tariff indicates the total amount in so many marks and pfennigs of
the charges to be paid for transportation by land and sea from nearly all sta-
tions of the German railways to the ports of the Near East (Alexandretta,
Alexandria, Braila, Burgas, Galatz, Jaffa, Constantinople, Malta-Valetta, Mer-
sino, Odessa, Piræus, Saloniki, Samsun, Smyrna, and Varna) and to East
African ports (Bagamayo, Beira, Chinde, Dar-es-Salaam, Delagoa Bay (Lou-
renç Marques), Durban (Port Natal), Ibo, Kilwa, Lindi, Mikindani, Mom-
bassa, Mozambique, Pangani, Quilimane, Saadani, Tanga, Zanzibar).
1" Les grandes campaguies de navigation," Paris, 1908, pt. 1.
GERMANY AND AUSTRIA-HUNGARY.
81
+
·
The railway delivers the goods directly to the wharf without the services
of a third party. The delivery of the goods at the railway station at the
initial point of shipment is made in the same way as in domestic traffic, the
only difference being the special bills of lading.
If 25 pfennigs be added to the tariff rates of the German Levant Line, the
new scale will represent the contract rates to Batum, Dedeaghatch, Haidar,
Panlsa, Constantza, Mariopoul, Novorossisk, Syroct, and Tagourog. An addi-
tion of 75 pfennigs or, in a few cases, of 1 mark, to the tariff rates will give the
rates to other ports of the Near East and to 120 stations of the Egyptian or
the Turkish railways.
This system presupposes an agreement between the German Levant Line and
the East Africa Line on the one hand, and the railway administration on the
other, to the effect that the rates from Hamburg to the Near East shall be
as low as possible. Thus there is a double reduction, one in the railway
rates, another in the ocean freights, and the goods can be sold in the Eastern
markets on advantageous terms.
An exact calculation of the reductions granted is impossible. The companies
have refused to bare the secret of their calculations. An analysis of the rates
is necessary to throw light on the underlying principles.
The tariff of the German East Africa Line shows the freight rates from the
various railway stations in Germany to Mombassa, Tanga, Dar-es-Salaam,
Zanzibar, Mozambique, Delagoa Bay, and Durban. The rates per 100 kilos
for less than 5,000 kilos of lead. cement, iron and steel, stones, coal, or zinc
from the railway station to the port of. destination are as follows: From Kiel,
via Hamburg, 3.28 marks ($0.78); from Danzig, via Hamburg, 4.60 marks
($1.09); from Essen, via Hamburg, 3.79 marks ($0.90); from Hanover, via
Hamburg, 3.46 marks ($0.82).
It
For very large increases in the haul the tariff shows rather small increases
in the freight rate, the haul from Dantzig to Hamburg is considerably longer
than the haul from Kiel, and yet the increase in the freight rate is only 1 mark
32 pfennigs (31 cents). The haul from Essen to Hamburg is about 300 kilo-
meters (186 miles) longer than the haul from Kiel; nevertheless, the increase in
the railway freight rate is only 51 pfennigs (12 cents). Thus the rate in-
creases very slowly in comparison with the increase in the length of the haul.
The ocean freight rate is about 35 francs per metric ton (6.86 per long ton).
The tariff of the German Levant Line is based on similar calculations.
is probable that the reductions in the railway rates have been established
with a view to attract export freight to Hamburg. Let us consider Stuttgart,
for example. This city is about halfway between Hamburg and Trieste. The
tariff of the German Levant Line has been calculated so as to draw Stuttgart
within Hamburg's sphere of influence. This consideration is of less weight in
regard to Hanover, for Hanover lies, essentially, within Hamburg's sphere
of influence. Hence the freight reduction for the haul from Hanover to Ham-
burg may be proportionately less.
ง
The effect of the through tariff may be judged by the following examples:
Suppose beer in cases is to be shipped from Breslau to Delagoa Bay. Under
the ordinary tariff, the railway rate for beer in bottles, carload lots, from
Breslau to Hamburg, is 3.76 marks (89.5 cents) per 100 kilos (220.46 pounds).
The freight by steamer from Hamburg to Delagoa Bay, is 6.40 marks ($1.52)
per 100 kilos. The total freight, under the ordinary tariff, is 10.16 marks
($2.42) per 100 kilos. However, if the beer is shipped directly from Breslau to
Delagoa Bay, via Hamburg, the freight rate under the through tariff of the
German East Africa Line is only 7.08 marks ($1.68) per 100 kilos.
If the beer is shipped directly from Lubeck to Delagoa Bay via Hamburg,
the freight is only 6.02 marks ($1.43) per 100 kilos, and this rate is less than
the ordinary steamship rate from Hamburg itself. In the former case the
haul by rail is 617 kilometers (383 miles); in the latter casc only 63 kilo-
meters (39 miles). Thus for an increase of 554 kilometers (344 miles) in the
haul the increase in freight is but 1.06 marks (25 cents). This amounts to a
reduction of about 74 per cent in the cost of railway transportation.
Owing to the advantages of the system, the Levantine Line has made rapid
progress. It inaugurated its service in the spring of 1890 with but four
steamers; in 1892, its fleet numbered seven steamships; in 1894, eight; in 1896,
nine; in 1897, ten; in 1898, fifteen; in 1900, twenty-one; in 1904, thirty. The
number of annual voyages increased from 24 in 1890-91 to 41 in 1896, 80 in.
1899, and 125 in 1903.
41987°-16-
-6
82
GOVERNMENT AID TO MERCHANT SHIPPING.
The increase in the merchandise traffic has been even more astonishing. The
trade of Hamburg with the Levantine ports had been so insignificant in for-
mer times that it was not even mentioned in the official statistics. Its value
was stated for the first time in 1889. During the period 1890-1901 the exports
from Hamburg to the Near East increased enormously. Thus, the exports
to the Russian Black Sea ports increased 621 per cent; to Roumania, 95 per
cent; to Asiatic Turkey, 1,556 per cent; to Greece, 307 per cent; and to North-
ern Africa, 1,094 per cent. During the same period the imports from Euro-
pean Turkey increased 424 per cent; from Asiatic Turkey, 159 per cent; from
Greece, 101 per cent; from North Africa, 2,162 per cent; and from Black Sea
ports, 44 per cent.
The East Africa Line has prospered in a similar way. In two years, 1904–
1906, German imports from Abyssinia, German Africa, and British East and
South Africa increased 45 per cent, and German exports to those countries 43
per cent.
In December, 1898, the administration of the Prussian State Railways ad-
dressed a circular letter to the German chambers of commerce asking for an
expression of opinion on the value of the services of the German Levant Line.
The replies received commended the line principally for the reason that its
rates were low and stable, thus simplifying the calculation of prices. At the
beginning of 1901 the German Levant Line was compelled to increase its
freight rates somewhat, owing to an increase in the costs of operation. Other
navigation companies had likewise increased their rates. The chambers of
commerce naturally regretted the increase, but nearly all of those consulted
were of the opinion that the interests of the German exporters would suffer
more from a suspension of the through tariff than from the raise.
It is to be noted, in conclusion, that it is an irrevocable principle of the
German Government to reduce, as far as possible, the direct subsidies to ship-
ping. This policy has been tried for years and found very effective; it has
contributed to develop the energy and ability of the German shipowners who
have thus been led to rely upon themselves alone.
DIRECT AID.
North German Lloyd. The policy of granting postal subventions
was instituted in July, 1886, as a result of the efforts of Bismarck,
who felt that financial aid of this character was necessary to enable
German ships to compete with the ships of other countries receiv-
ing subsidies on routes to remote points. The project was, however,
under discussion for several years before its adoption.
In its final form the mail-subvention act of 1886 granted the North
German Lloyd a subvention of 4,400,000 marks ($1,047,200) for a
period of 15 years for the maintenance of specified mail routes.
Of this sum, 1,700,000 marks ($404,600) was for a line between Ger-
many and China and Japan, 2,300,000 marks ($547,400) for a line to
Australia, and 400,000 marks ($95,200) for a branch line connecting
Trieste with the line to Australia at Alexandria.
The original contract with the North German Lloyd provided for
the following services:
(1) To the Far East: The East Asian line, making 13 voyages
annually from Bremerhaven to and from Shanghai, touching at a
Dutch or Belgian port to be designated by the Imperial Chancellor,
and at Port Said, Aden, Suez, Colombo, Singapore, and Hongkong,
with a branch or junction line from Hongkong via Yokohama.
Hioga, and a Korean port (to be likewise designated by the Chan-
cellor) to Nagasaki, and thence returning to Hongkong.
(2) To Australia: The Australasian line, making 13 voyages
each year from Bremerhaven to Sydney, Australia, touching en
route at a Dutch or Belgian port, Port Said, Suez, Aden, the Lagos
Islands, Adelaide, and Melbourne, with a branch line or feeder from
GERMANY AND AUSTRIA-HUNGARY.
83
Sydney via the Tonga Islands to Apia, in the Samoan Group, and
thence back to Sydney.
(3) In the Mediterranean: A semimonthly line from Trieste via
Brindisi to Alexandria.
An average minimum speed of 12 knots was required in the case
of the ships operating to and from eastern Asia and those on the
Mediterranean line and 11 knots for those on the Australian line.
For this service the North German Lloyd Co. bound itself to pro-
vide nine steamships, of which at least six were required to be built
specially for the purpose according to the most carefully detailed
specifications, and the remaining three were to be ready for service
within 18 months after the contract was signed.
All the vessels were to be built of German materials, in German
shipyards, upon plans approved by the Imperial Chancellor, and be-
fore going into commission had to be approved by a Government
board of experts.
The agreement contained several clauses fixing the status of postal
officers and employees on board, and the manner in which the im-
perial mails were to be handled and forwarded. Hamburg and
Bremen were to enjoy equal freight rates, and Government officials,
troops, prisoners, and freight were to be transported at rates 20 per
cent less than the ordinary tariffs.
The sale of any of the subventioned steamers was forbidden, except
by permission of the Government, and in case of war the Chancellor
might take possession of one or more of the vessels at their full value
or hire them for a proper consideration. In case of dispute between
the contracting parties each should choose two arbitrators, who
should elect an umpire, and the board thus constituted should decide
all questions in controversy.
in May, 1893, the Mediterranean line was discontinued and the
subsidy reduced to 4,090,000 marks ($973,420).
By a law of April 13, 1898, the subvention was increased to 5,590,000
marks ($1,330,420) per year under a new contract for 15 years,
which took effect on October 1, 1899. This contract called for the
use of faster steamers and for a fortnightly instead of a monthly
service between Germany and eastern Asia and provided that
the speed on this line was to be 13 knots for old steamers and 14 knots
for new steamers. On branch lines the speed was to be 12.6 knots,
while on the Australian line the speed between ports of call must
average 12.2 knots for old steamers and 13.5 knots for new. It was
stipulated also that the North German Lloyd should increase without
additional subvention the speed of these vessels in case foreign com-
peting lines should increase the speed of theirs.
To coordinate the steamship services in the Far East a branch or
auxiliary line was established between Singapore, New Guinea, and
Sydney to connect the principal lines mentioned above with the
direct Australian line. This service is performed by the Jaluit com-
pany of Hamburg, which receives a yearly subvention of 120,000
marks ($28,560) under an agreement concluded in December, 1901.
The connecting lines, which the North German Lloyd was to main-
tain in the Far East, have been taken over by the Hamburg-Ameri-
can Line, in consideration of an annual indemnity of 260,000 marks
($61,880) paid by the Bremen company.
84.
TO MERCHANT SHIPPING.
GOVERNMENT AID *
The subvention of the North German Lloyd for its steamship serv
ices to eastern Asia and Australia has been cut in half, the budget
for the fiscal year beginning April 1, 1914, providing only 3,045,000
marks ($724,710) instead of 6,090,000 marks ($1,449,420) for these.
services.
German East Africa Line.-Upon its institution the German East
Africa Line was granted a postal subvention as well as the benefit to
be derived from reduced railroad rates on goods carried by its ships.
Beginning with May, 1890, an annual postal subvention of 900,000
marks ($214,200) was to be paid this company for a period of 10
years, the company undertaking to make 13 voyages annually between
Hamburg and Delagoa Bay via the Suez Canal. Furthermore, it was
to run two coastwise lines, one between Zanzibar and: Lamu and the
other between Zanzibar and Inhambane. In July, 1900, the contract
was renewed for 15 years, and the subvention increased to 1,350,000
marks ($321,300). This contract called for ships of greater speed
and for two voyages monthly as well as the extension of the line to
the Cape of Good Hope with return trips along either the east or
the west coast of Africa.
•
4
The purpose of this subvention to the German East Africa Line
was not merely to provide regular and fast postal communication
between Germany and its east African colonies, but rather to
develop German trade and to foster. German colonial interests. This
fact has been well stated in the following words: "
?
·
It is evident that the Government is not trying to subsidize the merchant
marine in general. It has not established general bounties for shipowners, but
has limited its efforts to a well-defined sphere, and in granting subsidies to Far
Eastern and African lines it has sought not so much to encourage shipowners as
to make it easier for German capital and commercial activity to enter new
countries or colonies-East Africa, New Guinea, Kiauchau. In dispatching
steamers flying the Empire's flag to Delagoa Bay, to Shanghai, to Yokohama,
and Sydney it has indicated new countries to its emigrants and new markets
to its manufacturers and exporters.
When in May, 1900, the Chancellor asked the Reichstag to renew and
extend the contract of the German East Africa Line and to increase the.
Government subsidy he spoke of the "economic importance of the cape for
the development of the German trade," and of the need of a port of entry
nearer the cape than Delagoa Bay, but said nothing about the advantages
which the shipowners might derive from it.
b
Earnings of shipping companies.-The following table, which
is taken from official sources, shows, for the fiscal years 1909-10,
1910-11, and 1911-12, the total capitalization, reserves, assets, liabili-
ties, net profits, and average rate of dividend for all of the incor-
porated shipping corporations in Germany:
Number of companies.
Capital, total..
Entitled to dividends
Drawing dividends.
Reserves.
Assets, total c.
Items.
: 1909-10
1910-11
1911-12
51
$97,732, 796
97, 494, 796
59,753, 470
20, 720, 756
52
$99, 665, 356
99, 665, 356
90, 880, 776
45
$98, 228, 788
98, 014, 588
94, 638, 796
22, 488, 382
24, 998, 330
206, 065, 398
211, 901, 158
•
a
213, 392, 942
• L'État et la Marine Marchande en Allemagne. G. Johnston in the Revue Politique et
Parlementaire. Dec. 10. 1902, pp. 510-513.
Vierteljahrshefte zur Statistik des Deutschen Reichs. Ergänzungsheft II. Die Geschäfts-
ergebnisse der deutschen Aktiengesellschaften, 1909-10, 1910-11, 1911-12.
Not including profit balance (Verlust-Saldo).
·GERMANY ►
85
AND AUSTRIA-HUNGARY.
:
ltems.
1
Liabilities, totalª.
Capital stock.
Reserve.
Secured loans.
Mortgage loans.
Assistance funds, official
Other liabilities..
Companies with annual profits
Capital entitled to dividends…….
Total annual profits..
Companies with annual loss
Capital entitled to dividends.
Total loss....
Excess of annual profits over annual loss...
Per cent of-
Capital entitled to dividends...
Capital and reserve..
Companies paying dividends.
Capital entitled to dividends.
Dividends..
Per cent of capital entitled to dividends.
• Not including loss balance (Gewinn-Saldo).
1909-10
1910-11
1911-12
202, 293, 812❘ $205, 158, 618
$204, 100, 708
97, 732, 796
99, 665, 356
98, 228, 788
20, 720, 756
22, 488, 382
44, 516, 948
44, 041, 662
5,314, 302
5, 169, 836
297,500
33, 711, 510
340,340
33, 453, 042
24, 998, 330
44, 695, 924
3,903, 200
239, 904
32,034,562
37
44
41
$92, 266, 650
4,866, 386
$97,316, 296
8,069, 866
$97,147, 316
9, 614, 248
14
7
4
$5, 228, 146
489, 566
$2, 194, 360
448, 154
$867, 272
115, 668
4,376, 820
€ 7,621,712
.9, 498, 580
4.49
7.65
9.69
3.70
6.24
7.72
27
31
39
$59,753, 470
3,762, 066
3.86
$90,880, 776
5,753, 412
5.77
$94, 638, 796
7,447, 258
7.60
The so-called "annual profits" and "annual loss" are arrived at by including with the results of the
business of the specified year the plus or minus balance carried over from the preceding year.
c One company showed neither an "anntal profit" nor an "annual loss."
Details as to the capital, reserves, investment, gross earnings, and
dividends of 24 of the largest German steamship companies are
shown for the year 1912 in the following table:¹
Name of company.
Capital.
Reserve.
Accounts
receivable.
Secured
loans
(including
Cash and
other
Invest-
mort-
gages).
quick
ments.
assets.
Argo Dampfschiffahrts Gesellschaft. $1,666, 000
Deutsch-Australische Dampfschiffs
$442,564
$910,350 $1,273, 775 | $2, 145, 072
Gesellschaft……..
4,284,000
Deutsche Levante Linie.
2,980, 761 $1, 254, 144
214, 200
2,142,000
870, 423
Deutsche Ost-Afrika Linie.
18, 190 | 1,071, 000
151,391
966, 499
9, 628, 010
2,380,000
1,900, 637
3, 436, 294
Flensburger Dampfer Kompagnie.
1, 130, 500
913, 084
476,000
Kosmos Deutsche Dampfschiffahrts
Gesellschaft….
Flensburger Dampfschiffahrts
Gesellschaft of 1869..
Hamburg-Amerikanische
fahrt A. G..
Packet-
Hamburg-Bremer Afrika Linie A. G.
Hamburg-Sudamerikanische
Dampfschiffahrts Gesellschaft.
Hansa Deutsche Dampfschiffahrts
Gesellschaft….:
Horn Dampfschiffs Reederei
35, 700,000 12, 205, 543 | 9, 242, 286
1, 309, 000
35,076 127, 676
4,393, 1773, 229, 375 | 3,993, 260
83,929
171, 836
199, 738
5,051, 263
658,070
476,000
67,603
272,359
372,589
17,025, 925
833,000
2,320, 500 | 3,102, 598
18,937, 732 | 60, 133, 987
291, 281
2,575, 743
12,623,392
5,950,000 3,617,600
833,000 86, 755
1,431,332
267,750
6, 435, 721
452, 542
7,824, 195
940, 100
3,332,000
Midgard Deutsche Seeverkehrs A. G.
Neptun Dampfschiffahrts
833,000
2,633, 265. 1,345,674
16,531
1,396, 822
4, 449, 337
1, 429, 164
4,599, 113
Gesellschaft.
1,190,000
Neue Dampfer Kompagnie in Kiel………
Neue Dampfer Kompagnie in Stettin
Nord deutscher Lloyd..
357,000
753, 746
29,750,000
Oldenburg-Portugiesische
700, 425
58,534
121, 874
6,530, 461
3,310,305
Dampf-
336, 770
23,800
68, 782
16,588, 600
476, 020
42, 205
150, 821
21,244,847
943, 937
2, 179, 123
430, 095
990, 716
42,587, 461
|
schiff Reederei..
714,000
Ozean Dampfer Aktien-Gesellschaft.
Reederei-Aktien-Gesellschaft of 1896.
Rickmers Reismuhlen Reederei und
Schiffbau A. G…………
285, 600
476,000
236,810
24, 960
200, 822
75,057
273, 700
72, 257
285, 600
3,094, 000
Roland Linie A. G……
1,166, 200
2,142, 000
Union Dampfschiffs Reederei A. G... 1, 428, 000
Visurgis Reederei A. G………..
344, 785
31, 902
309, 400
23, 699
357,000
85,680
21, 420
187, 243
59, 173
226, 477
3,500, 876
1, 270, 668
335, 073
61,798
1,354, 667
378, 420
1,206. 449
2,127,921
264, 821
1,332, 715
302, 408
¹ Grotewold: Die Deutsche Schiffahrt in Wirtschaft und Recht, pp. 86–87.
86
GOVERNMENT AID TO MERCHANT SHIPPING.
Gross earnings.
Dividends.
Name of company.
Age of
tonnage.
Per cent
of
Per cent depreci-
A mount.
on
ation.
1912.
1913.
capital.
A. G.
Argo Dampfschiffahrts Gesellschaft...
Deutsch-Australische Dampfschiffs Ges-
ellschaft..
Deutsche Levante Linie…….
Deutsche Ost-Afrika Linie.
Flensburger Dampfer Kompagnie.
Flensburger Dampfschiffahrts Gesell-
schaft of 1869……….
Hamburg-Amerikanische
Hamburg-Bremer Afrika Linie A. G.
Hamburg-Sudamerikanische Dampf-
schiffahrts Gesellschaft..
Hansa Deutsche Dampfschiffahrts Ges-
ellschaft...
Horn Dampfschiffs Reederei.
Kosmos Deutsche Dampfschiffahrts
Gesellschaft..
Midgard Deutsche Seeverkehrs A. G..
Neptun Dampfschiffahrts Gesellschaft..
Neue Dampfer Kompagnie in Kiel..
Neue Dampfer Kompagnie in Stettin...
Norddeutscher Lloyd...
Oldenburg-Portugiesische Dampfschiff
Reederei..
Ozean Dampfer Aktien Gesellschaft.
Reederei-Aktien Gesellschaft of 1896..
Years.
9.3
Per cent.
Per cent.
$582, 787
5.2
1,929, 320
12
1, 155, 204
8.5
958, 526
11
186, 074
11.8
132,339
Packetfahrt
10.7❘ 12,756, 321
3.3
229, 197
9
2,567,962
10
NO ONOON 01
4,807,600
80
8.5
283, 642
34
6.5
1,514,069
45
7.7
9.5
253, 078
479,558
30
40
15.3
61, 273
172,655
9,573, 161
17
23
32
6.5
283, 695
41
116, 481
41
153, 840
32
* *noo 2 000 00 8* 4897K2 ZES
35
45
54
40
39
8322 3
12
10
12
14
14
14
14
7
12
8
10
15
28
8
15
36
12
18
58
36
15
16
21
11
7
8
14
11
16
6
20 450007 09
25 2014 20
10
6
14
14
20
10
14
16
16
6
8
16
16
10
10
10
12
5öä ∞∞¬ãnã of 2 -8 & Good
10
8
15
10
16
6
7
8
Rickmers Reismuhlen Reederei und
Schiffbau A. G...
3
Roland Linie A. G.
3.2
832, 020
39
16
Union Dampfschiffs Reederei A. G..
Visurgis Reederei A. G.....
7700
6
8
0
0
AUSTRIA-HUNGARY.
In considering the subject of Government aid to the merchant
marine of Austria-Hungary, account should be taken of the fact that
the Kingdom of Hungary and also the Kingdom of Austria grant
subsidies and subventions. The merchant marine of the empire is
not extensive and ranks only eleventh among the merchant navies
of the world. . It is unique in the small proportion of sailing vessels
of more than 100 gross tons, only two-tenths of 1 per cent of the
total tonnage of ships of 100 tons or more being sailing ships.
In this connection it should be remembered that the Austro-Hun-
garian Empire has a very limited seaboard with only two important
commercial seaports, namely, Trieste and Fiume, both of which are
remote from the richest agricultural, mineral, and manufacturing
sections of the empire. A large part of the foreign trade of Austria-
Hungary is with Germany, Russia, and the Balkan States, for which
the boats on the Danube and the Elbe, as well as the railroads, are
the most efficient means of transportation. For much of the overseas
trade Hamburg and Bremen are more convenient than either Trieste
or Fiume.
The actual and potential net tonnage of the merchant navies of
the Kingdoms of Austria and Hungary and of the empire in 1870,
1880, 1890, 1895, 1900, 1905, 1910, and 1911 are shown in the follow-
ing table:
GERMANY AND AUSTRIA-HUNGARY,
87
Year.a
Actual net tonnage.b
Total.
Sail.
Steam.
Potential
net ton-
nage.c
AUSTRIA-HUNGARY.
1870...
1880.
329,377
279,400
49,977
429, 331
1890..
322, 612
258, 642
63,970
450, 552
1895...
236, 648
138, 796
97, 852
432, 352
1900...
238, 607
93, 328
145, 279
529, 165
1905.
299, 725
52,736
246,989
1910...
405, 635
39, 565
366, 070
1911...
509, 970
32, 235
477, 735
495, 841
32, 871
462, 970
793, 703
1, 137, 775
137,775
465, 440
1,421, 781
AUSTRIA.
1880..
1890..
252, 649
188, 860
63,789
380, 227
1895..
182, 263
94, 789
87,474
357, 211
1900.
172, 946
65, 485
107, 461
387, 868
1905.
230, 559
39, 961
190, 598
611, 755
1910.
313, 449
37, 115
276, 334
866, 117
1911…….
398, 640
30, 736
367, 904
361, 831
1, 134, 448
31,344
330, 487
1,022, 805
HUNGARY.
1880.
1890...
69,963
69, 782
1895...
54, 385
44, 007
181
10,378
70,325
75, 141
1900..
65, 661
27, 843
37, 818
141, 297
1905.
69, 166
12,775
56, 391
181,948
1910...
92, 186
2,450
89, 736
271,658
1911..
a On Dec. 31.
Includes vessels of 2 tons and over.
111, 330
1,499
109, 831
134,010
330, 992
1,527
132, 483
398, 976
c Computed on the theory that 1 ton of steam tonnage equals 3 tons of sail tonnage.
INDIRECT AID.
Reservation of coasting trade.-The coasting trade of Austria-
Hungary is not extensive but it is reserved to ships flying the flag of
that Empire.
Exemption from import duties.-Since the passage of the law of
March 30, 1873, all materials for the construction, repair, and altera-
tion of vessels have been imported free of duty. Foreign-built ves-
sels also are admitted free of duty, if registered in Austria-Hungary;
otherwise, a duty of 1 crown ($0.203) per register ton is levied on
wooden vessels, and 14.50 crowns ($2.94) per 100 kilos of metal, on
iron or steel vessels.
Exemption from income and other taxes.-The exemption of ship-
ping companies from the payment of income and trade taxes was
instituted in Austria by the law of June 18, 1890. This exemption
applied to all iron or steel vessels engaged in ocean voyages, but was
not of any substantial benefit, as is indicated by the fact that the
shipping tonnage continued to decline.
This law of 1890 was repealed by article 9 of the subsidy law of
December 27, 1893, which provided that after January 1, 1894, all
seagoing vessels should be exempt from trade and income taxes for a
period of five years thereafter and that newly constructed seagoing
vessels built in Austria should be exempt for a period of five years
from the date of their registry.
The exemptions granted by article 9 of the law of 1893 were ex-
tended for a period of five years by a law passed in 1899.
88
GOVERNMENT AID TO MERCHANT SHIPPING.
The Hungarian subsidy law of June 30, 1893, which antedated the
Austrian law on subsidies by nearly six months, granted the follow-
ing tax exemptions: (1) Sailing vessels registered at the end of 1892
to be exempt from the trade tax for a period of six years; (2) sailing
vessels and steamships entitled to these bounties, and not owned by a
company under mail contract with the State, to be exempt from
income taxes for a period of 10 years.
Preferential railway rates.-So far as can be learned, no preference
in the matter of freight rates or accommodations is granted to export
commodities shipped on vessels flying the Austrian flag. The latest
available information as to the extent to which preferential railroad
rates are granted is given in the following extract from British
Diplomatic Reports Commercial No. 2 (1898), page 7:
1. To enable a line of railway with a circuitous route to compete with a more
direct line, which would otherwise monopolize the carriage of goods from one
given point to another.
2. To enable an Austrian industry to compete with a similar industry abroad,
which is more advantageously situated. Thus preferential rates are granted
for this reason on Bohemian glass, on beet root and its products, and on sugar
for export.
3. Preferential rates are granted in aid of charitable, educational, or relig-
ious establishments, e. g., materials for the construction of churches, schools,
hospitals, etc., are generally carried at reduced rates, and the same are some-
times granted to materials for the construction of new factories, provided that
they are brought into connection with the line of railway and use it for the
transport of their goods.
4. Preferential rates are sometimes granted in aid of an industry or manufac-
ture which is passing through a crisis, if its importance to the railway line and
to the country at large is sufficiently considerable to justify such support.
Preferential rates are granted for reasons such as those above stated to all
manner of goods and to amounts varying from 1 per cent to 50 per cent reduc-
tion, but the rate charged is never less than the actual cost of carriage to the
line in question.
Preferential rates are also granted by lines owned by private companies on
the same system.
Reimbursement of Suez Canal dues.-The policy of making a reim-
bursement to ships under the Austrian flag of the Suez Canal dues
paid by them was instituted by the mail subvention contract of the
Austrian Lloyd Steamship Co. approved July 25, 1891.
The amounts expended by the Austrian Government in reimburse-
ment of Suez Canal dues in the years 1901 to 1910 are as follows:
1901, $402,080; 1902, $402,080; 1903, $395,585; 1904, $395,585; 1905,
$416,665; 1906, $427,080; 1907, $427,080; 1908, $492,500; 1909,
$462,300; 1910, $192,500.
Loans to shipowners.-The policy of granting loans to Austrian
shipowners was begun in 1891 under the mail subvention contract
between the Austrian Government and the Austrian Lloyd Steam-
ship Co. This contract provided for advances amounting in all to
1,500,000 florins ($609,000) for new construction, to be available in
three equal parts on September 1, 1891, January 2, 1892, and Janu-
ary 2, 1893, and to be repaid without interest in five yearly install-
ments of 300,000 florins ($121,800) each beginning January 2, 1902.
The loan made to the Austrian Lloyd antedates by about 12 years
the loan made by the British Government to the Cunard Steamship
Co., which was effected in 1903.
The Danube Steamship Co. has also been granted loans by the
Austrian Government. Under a contract entered into on July 4.
GERMANY AND AUSTRIA-HUNGARY.
89
1892, for the maintenance of regular passenger service between points
on the Danube River, this company received not only an annual sub-
vention but loans to an equal amount, namely, 250,000 florins ($101,-
500) per year for the period from 1891 to 1900. Advances to the
amount of 500,000 crowns ($101,500) were paid in 1902, 300,000
crowns ($60,900) in the years 1903 to 1905, and 600,000 crowns
($121,800). in 1906. All advances were to be repaid without interest.
DIRECT AID.
AUSTRIAN BOUNTIES OR SUBSIDIES.
The policy of granting direct State aid in the form of shipping
bounties or subsidies was instituted in Austria by the law of Decem-
ber 27, 1893, which took effect on January 1, 1894. This law was
enacted for a period of 10 years and provided for four distinct bene-
fits to shipping, namely, trade bounties, navigation bounties, depre-
ciation bounty, and exemption from trade and income taxes. These
grants were not, however, designated as "bounties" but as "allow-
ances." Apparently the Austrian Diet avoided the use of the word,
as other legislatures have done, even though the grants were in fact
bounties.
LAW OF DECEMBER 27, 1893.
Trade bounty.-A trade bounty was granted to Austrian steam
and sailing vessels engaged in the over-seas or the long coasting
trade. To be entitled to this bounty it was required that the ships
should be owned to the extent of at least two-thirds by Austrian
citizens, should be less than 15 years old, and should have a rating
of Class A, I or II with the Veritas Austro-Ungarico or other
approved classification society. The following table shows the rates
of trade bounty granted:
Steamers of iron or steel.
Sailing vessels of-
Iron or steel..
Wood or nixed construction..
Class of vessel.
Bounty per net ton.
Florins.
Dollars.
6.00
2. 44
4.50
1.83
3.00
1.22
The above rates were increased by 10 per cent in the case of
vessels built in Austrian shipyards after the passage of the act and
by 25 per cent if at least one-half of the material used should be
domestic. On the other hand, the rates were reduced 5 per cent for
each year of age and ceased altogether when the ship was 15 years
old.
Depreciation bounty.-Provision was made also for ships too old
to receive the trade bounty. A bounty amounting to 1 florin ($0.406)
per net ton per year was paid to registered Austrian ships at least
15 years of age on July 1, 1893, that were engaged in the over-
seas or long coasting trades and had a rating of Class B-II with the
Veritas Austro-Ungarico. This bounty was to be paid for a term of
five years.
90
GOVERNMENT AID TO MERCHANT SHIPPING.
Navigation bounty.-A bounty was also paid to steamships and
sailing vessels operating under the Austrian flag in short coasting
voyages between Austrian ports in the interest of domestic trade and
intercourse. This bounty amounted to 5 kreutzers (2 cents) per net
register ton per 100 nautical miles of voyage.
The bounties provided for by the law of December 27, 1893, were
not granted to the following classes of vessels: (a) Ships already
receiving State bounties; (b) ships operated under postal subven-
tion contracts; (c) ships belonging to industrial establishments.
Foreign-built ships that received a bounty while under the Aus-
trian flag were required to refund the entire amount received by them
if they passed under a foreign flag within three years after receiving
the bounty. Austrian-built ships were required to refund the
bounties if sold to a foreign nation within two years after they had
received such bounties.
LAW OF FEBRUARY 23, 1907.
The policy of trade and navigation bounties was continued by
the law of February 23, 1907, which was enacted for a period of 15
years, beginning January 1, 1908. It provided for three classes of
bounties, namely, maintenance or trade bounties, navigation houn-
ties, and construction bounties, in addition to exemption from taxa-
tion.
Maintenance bounty.-The maintenance bounty provided in the
new law, like the trade bounty of the preceding law, is an annual
lump-sum bounty with few limiting conditions. The maintenance
bounty is granted to Austrian seagoing merchant vessels, both sail
and steam, engaged in over-seas or long coasting trips, owned to the
extent of at least two-thirds by Austrian citizens, and under the
exclusive management of Austrian citizens. To secure the bounty
the ships must be not less than 400 tons gross register and not less
than 15 years old and must have a rating of Class A, I or II, with the
Veritas Austro-Ungarico or other approved classification society.¹
In the case of steamships there is an additional requirement that
they must have shown upon trial trips, when half loaded, a speed of
at least 10 knots. This bounty is granted to foreign-built ships
only when they have been registered in Austria within two years
after their launching.
2
The rate of the bounty varies not only with the gross tonnage but
also with the age of the ship and the character and country of con-
struction. The maximum rate of 10 crowns ($2.03) per gross ton per
year is paid to iron or steel steamships completely constructed in
Austrian shipyards after July 1, 1907. An annual bounty of 7
crowns ($1.42) per gross ton is paid to all other iron or steel steamers
if registered before the end of 1910, and 6 crowns ($1.22) if registered
after that date. For sailing vessels constructed in Austrian ship-
yards, whether of wood only, or of wood and metal, a bounty of 6
crowns ($1.22) is paid. In no case is the bounty paid on tonnage in
excess of 7,000 gross tons.
The above rates were to be paid during the first three years only,
and were to be decreased 5 per cent per annum from the fourth to
the ninth year, and 10 per cent per annum beginning with the tenth
1 Art. 1.
2 Art. 2.
GERMANY AND AUSTRIA-HUNGARY.
91
year. A deduction is made whenever a vessel is laid up or is inactive
for more than six months on account of repairs or for more than
three consecutive months for any other reason.
To be entitled to the maintenance bounty a vessel is required to
depart from an Austrian port on a commercial voyage at least once
a year, but this requirement may be waived in cases where a vessel
makes voyages between foreign ports in connection with Austrian
export enterprises and carries merchandise benefiting Austrian pro-
duction.
The owners of vessels receiving the maintenance bounty are re-
quired, under article 17 of the law, to place their vessels in time
of war at the disposal of the State. Subsidized vessels of less than
600 tons gross are further required, on demand of the imperial and
royal maritime authorities, to take on board one sailor from the
nautical school, in addition to the regular number of apprentices,
while those having a gross tonnage of 600 tons or more must take
on two sailors of this class as cadets, in addition to a designated
number of student engineers and of mates of the merchant marine
desiring to obtain a captain's license.
Navigation bounty. The navigation bounty of the law of 1907 is
not essentially different from that of the preceding law. The rate
is the same, namely, 10 heller (5 kreutzers, or 2 cents) per net regis-
ter ton per 100 nautical miles of voyage. A limitation as to tonnage
was introduced in the new law so as to provide that these bounties
should not be paid on tonnage in excess of 5,000 net tons.
It is required in the new law, as in the old, that the bounty should
in general be limited to ships making voyages in the interest of na-
tional trade and commerce beyond the limits of the short coasting
trade (Kleine Küstenfahrt). Under the present law the provision
may be widely construed, since it is provided that the bounty may be
paid for voyages between foreign ports if such voyages are a part
of a through Austrian service and have for their object the exporta-
tion or importation of merchandise affecting Austrian industry or
the extension of Austrian trade. Under the same conditions, it might
also be noted, a navigation bounty may be paid for voyages within
the limits of the short coasting trade.
The payment of the navigation bounty under the new law is con-
tingent upon the transportation of a minimum amount of cargo. In
the case of vessels arriving at or clearing from any Austrian port,
the cargo must equal at least one-third of the net tonnage of the
vessel. This minimum may be lowered by the Minister of Com-
merce to one-fourth the net tonnage of the vessel if it is a ques-
tion of encouraging trade on certain routes that offer inducement
to Austrian enterprise. Ordinarily the bounty is paid on the short-
est distance between ports but in the case of vessels making calls
at intermediate ports in Austria, it is granted also for the extra
distance run in making the intermediate ports if the cargo dis-
charged or taken on at one of such ports is equal to at least one-
sixth of the net tonnage of the vessel.¹
An important provision gives the State the power by royal decree
to reduce the rate of the bounty or to suppress it entirely either for
1 Art. 5.
92
GOVERNMENT AID TO MERCHANT SHIPPING.
1
particular kinds of cargo or for voyages in one direction. At least
six months' notice, however, must be given of any change in the
bounty.¹
1
Construction bounty. The payment of construction bounty was
first made a part of the ship subsidy policy of Austria by the law
of February 23, 1907. This bounty consists of a single payment and
is granted only in respect to hulls and boilers built in Austrian yards.
The following table shows the basic rates of bounties on hull con-
struction under this law: 2
Steamships of iron or steel...
Sailing vessels of--
'Iron or steel.
Wood or wood and metal.
Class of vessel.
Bounty per gross
ton.
Crowns.
Dollars.
40
8.12
14
2.84
10
2.03
A bounty of 8 crowns ($1.62) per 100 kilos is granted for new
engines, boilers, and auxiliary apparatus manufactured in Austria-
Hungary and installed in iron or steel steamships or in sailing vessels
provided with auxiliary machinery.
To earn the above bounties it is required that at least 50 per cent
of the material used in the construction of the hull shall be of do-
mestic production. If the domestic material used exceeds that mini-
mum, the bounty is to be increased by 1 per cent for each per cent
above 50 per cent of material used. On the other hand, the bounty
is to be diminished by one-half of 1 per cent for each per cent less
than 50 of domestic material used in the construction. These per-
centages, it should be noted, are based on the value and not on the
weight of the material used, and are calculated separately for the
hull and the machinery. The basic bounty rate is granted even
where the proportion of domestic material is less than 50 per cent
under the following circumstances: 3
1. When it is impossible to procure the necessary material in
sufficient quantity in the Kingdoms and Provinces represented in
the Reichsrath.
2. When the materials do not meet the requirements of a particular
case.
3. When they can not be furnished in time.
4. When they can be furnished only at a price greater (charges
and transportation included) than the cost of the same materials
abroad, including the cost of transportation.
The total amount to be paid in bounties under the law of February
23, 1907, is limited by provisions similar in character to those insti-
tuted in the subsidy system of France in 1902. Thus, the main-
tenance bounty is payable on only 18,000 gross tons per year, includ-
ing not more than 3,000 gross tons of sailing vessels. Foreign-built
vessels entitled to the maintenance bounty are admitted to partici-
pation therein only in those years in which the maximum tonnage is
¹Art. 6.
2Art. 8.
Annual Report of the Commissioner of Navigation for 1909, p. 256.
GERMANY AND AUSTRIA-HUNGARY.
93
not taken up entirely by ships of domestic construction. The con-
struction bounty is payable on not more than 25,000 gross tons in
any one year and on not more than 275,000 gross tons during the
entire term of the law.
An indirect limitation on the total expenditures for navigation
bounties is contained in the limitation upon the total annual expendi
tures for bounties of all kinds. The law provides that the total
amounts paid in bounties shall not exceed 4,300,000 crowns ($872,-
900) in 1907; 4,400,000 crowns ($893,200) in 1908; 4,700,000 crowns
($954,100) in 1909; 5,000,000 crowns ($1,015,000) in 1910; 5,300,000
crowns ($1,075,900) in 1911; 5,600,000 crowns ($1,136,800) in 1912
and each year thereafter.
A deduction of 5 per cent from the maintenance and navigation
bounties for the benefit of sailors' relief funds was provided for.
It is interesting to note that the payment of bounties has been
continued despite the war in Europe, as is indicated in the following
dispatch from the American consul at Trieste: 1
By an imperial decree in October, 1914, it was provided that the Government
subsidies heretofore paid to Austrian shipowners would be continued and the
Maritime Government authorized to pay the respective proportions of the
annual rates of subsidy for the time of inactivity of the navigation on the
condition that the shipowners request and obtain the consent of the Maritime
Government before discharging or reducing the wages of employees on board
their ships and in their offices on January 1, 1915; that they pay such em-
ployees minimum wages to be stipulated from time to time by the Maritime
Government and furnish a corresponding subvention to the families of the
crews of their ships interned in enemy or neutral ports, in such instances
where remunerations can not be made to the crews, as well as to the families
of those employees who are prisoners of war. A new ministerial decree has
now been issued under date of April 1, 1915, whereby shipowners are assured
of the continued validity of the subventions to navigation, provided they con-
tinue to help their employees.
POSTAL SUBVENTIONS IN AUSTRIA.
Austrian Lloyd Steamship Co.-The most important Austrian
shipping company receiving postal subventions is the Austrian
Lloyd, which was founded in 1836 as the marine section of the
Triester Lloyd. The original capital was 1,000,000 florins ($406,-
000), which was soon increased to 1,500,000 florins ($609,000) and
later to 3,000,000 florins ($1,218,000). The State guaranteed the
interest on the capital borrowed by the promoters of this company,
and in 1845 assumed a general supervision over the affairs of the
company on the occasion of an increase in the capital and on account
of guaranteeing the interest. In 1851 the first formal mail contract
was entered into with the Austrian Government. In 1855 the com-
pany received its first postal subvention, which amounted to 1,000,000
Horins ($406,000) per annum, and in 1858 its first mileage subven-
tion.
After the conclusion of the first agreement with Hungary the
Lloyd assumed the name Austro-Hungarian Lloyd. From 1872 until
June 30, 1888, the company had an agreement with both Austria and
Hungary with respect to services in the Adriatic and Mediterranean
in addition to a separate agreement with Austria regarding services
in the over-seas trade.
1 U. S. Daily Commerce Reports, May 8, 1915.
94
GOVERNMENT AID TO MERCHANT SHIPPING.
In 1888 the Austrian Lloyd concluded a new agreement with both
Kingdoms, in accordance with which the company undertook for
a small increase in the subvention extensive additional services. This
agreement was superseded by the contract of July 25, 1891, which
was made with the Austrian Government alone. Since that time
the Austrian Lloyd has been a purely Austrian enterprise. The
Austrian Lloyd and the Adria, a Hungarian company, made a divi-
sion of the traffic, so that the Lloyd received the services in the Levant
and in Indo-China and the Adria the lines to the West, while the
line to Brazil was to be operated by the two lines jointly.
The contract of July 25, 1891, provided for the operation of 19
mail lines, 6 in the Adriatic, 7 in the Mediterranean, 2 in the Black
Sea, 3 to Índia and China, and 1 to Brazil. Subventions were to be
paid on a mileage basis and varied not only with the distance covered
but with the speed of the boat and the character of the route. Sub-
ventions for routes in the Mediterranean ranged from 1.80 florins
to 3.55 florins ($0.73 to $1.44) per mile, and on the routes to India
and China and Brazil from 1.70 florins to 2.80 florins ($0.69 to $1.14).
The total annual subvention might not, however, exceed 2,910,000
florins ($1,181,460) in any one year.
The following table shows the rates of payment made on the
various routes provided for in this contract:
Service and speed.
Adriatic and Mediterranean services:
11 knots..
10 knots..
@ knots...
Over-seas service:
Trieste-Santos (Brazil)
Other voyages—
11 knots or more.
Less than 11 knots..
Payment per nau-
tical mile.
Florins. Dollars.
3.55
1.44
2.40
.97
1.80
73
2.00
.81
2.80
1.14
1.70
.69
This contract also called for the reimbursement by the Government
of the Suez Canal dues paid by this company. In addition, the State
was to advance the company 1,500,000 florins ($609,000) for new
construction. This advance was to be made in three equal parts on
the following dates: September 1, 1891; January 2, 1892; and Jan-
uary 2, 1893. These advances were to be repaid, without interest, by
the company in five yearly installments of 300,000 florins ($121,800),
beginning January 2, 1902.
In return for this governmental assistance the steamship company
was bound under the contract to perform the following services:
1. To carry both letter and parcel post free of charge.
2. To place its vessels at the disposal of the Government in time
of war, in return for satisfactory compensation.
3. To permit the State to nominate three representatives on the
board of directors, the president of the board to be appointed by
the Emperor and the other two members by the Minister of
Commerce.
GERMANY AND AUSTRIA-HUNGARY.
95
4. To submit all freight tariffs to the Minister of Commerce for
approval.
5. To use at least 20,000 tons of Austrian coal a year.
6. To employ only Austrian subjects as officers of the company.
On March 16, 1907, the Austrian Lloyd entered into a new postal
subvention agreement with the Austrian Government. This agree-
ment runs for 15 years, or until January 1, 1922, and provides for
an even greater participation by the Austrian Government in the
affairs of the company.
The contract contains the following requirements: (1) Capital
stock to be increased to 28,800,000 crowns ($5,846,400); (2) all mat-
ters involving loans or the more important property transactions,
etc., to be subject to approval of the State; (3) a depreciation fund
to be established by setting aside each year an amount equal to 5
per cent of the purchase price of the company's fleet, this fund to
be used only for the purchase of new ships; (4) a reserve fund equal
to 10 per cent of the total capital stock to be established by setting
aside an amount equal to 20 per cent of the net earnings during the
first year and 12 per cent thereafter until the fund should reach the
required proportion of the capital stock; and (5) the State to receive
one-third of net earnings in excess of 6 per cent.
The agreement provides further that the Austrian Government
shall have 2 representatives on the board of directors, if this board
should have less than 8 members, and 3 representatives if the board
should have from 8 to 11 members. Two of the Government repre-
sentatives are named by the Minister of Commerce and the third,
who acts as president, by the Emperor.
Regarding the character of boats to be operated on the subven-
tioned lines, the contract stipulates that on the express lines in the
Levant, steamers shall have a minimum gross tonnage of 3,000 tons;
on the other lines in the Levant, at least 2,800 tons; and on all over-
seas lines, at least 4,000 tons. It was further provided that the com-
pany should put into service at least 120,000 tons of new ships during
the first 12 years of the contract, and of this total at least 60,000 tons
should be commissioned before December 31, 1911. To assist in
this building program the Government agreed to advance to the com-
pany 100 crowns ($20.30) per ton on all new ships put into service
during the first five years of the contract, but not more than 1,200,000
crowns ($243,600) in any one year. These advances were to be re-
paid in five annual installments during the last five years of the con-
tract.
The Austrian Government is given a large measure of control
over the affairs of the company, under a clause of the contract which
provides that all freight contracts must be submitted to the Minister
of Commerce for approval and that changes therein might be made
at the option of the Minister of Commerce.
Details as to the requirements of the contract with respect to
routes, number and length of voyages, and the minimum gross ton-
nage and minimum speed of boats to be used on each service, as well
as the subvention per mile and per year, are given in the following
table: 1
¹ Annual Report of the Commissioner of Navigation for 1909, p. 53.
96
GOVERNMENT AID TO MERCHANT SHIPPING.
Mini-
Total
Miles
Mini-
Subven-
mum
Route.
Voyages. per
mum tion per
annual
gross
subven-
voyage.
tons.
speed.
mile.
tion.
Trieste to Constantinople...
Knots.
Trieste to Salonica……
Trieste to Smyrna to Constantinople.
Trieste to Beirut to Messina.
2'
Trieste to Beirut to Messin :
26
Trieste to Alexandria.
Constantinople to Braila
20
Constantinople to Odessa.
26
Constantinople to Batum.
Trieste to Bombay..
12
Trieste to Bombay
Trieste to Calcutta…
12
12
********32-22
52
2,542
3,000
12
$1.44
$19.), 345
52
3,414
3,000
10
.97
172, 202
52
3,531
2,800
10
.97
178, 256
3,700
3,000
10
.97
3,898
93, 314
3,000
10
.97
98,303
52
.2, 424
3,000
14
1.44
181,509
828
2,800
10
.97
16,063
849
2,800
10
.97
21, 412
1,262
3,000
10
.97
63,655
8,686
4,000
13
1. 14
118,824
6
8, 686
4,000
10
.69
35,960
14, 244
4,000
10
.69
117, 940
19,643
4,000
10
.69
162, 644
Trieste to Kobe…….
The total subvention in any one year can not exceed 7,234,412
crowns ($1,468,586) nor be less than 5,700,000 crowns ($1,157,100).
In addition to the subvention, the Austrian Government agreed in
this contract to reimburse the Austrian Lloyd for all Suez Canal dues
paid by the ships of this company on 42 voyages per year into the
Indian and Pacific Oceans. (For amount of reimbursement see
p. 88.)
On October 15, 1909, the Austrian Lloyd entered into a new con-
tract with the Austrian Government for the maintenance of regular
steamship services to Dalmatia and Albania. Under this contract,
which has not yet been approved by law, the Austrian Lloyd under-
took the maintenance of regular services on the following routes:
(1) Trieste to Cattaro, (2) Trieste to Spizza, (3) Trieste to Corfu to
Perveza.
On the line between Trieste and Cattaro the company was to oper-
ate three boats weekly until 1913, and after that time four boats
weekly, all boats to have a speed of at least 16 knots. It was pro-
vided also that the service might be increased to seven boats weekly
at the direction of the Minister of Commerce. On the lines between
Trieste and Spizza and between Trieste, Corfu, and Perveza one
round voyage weekly is required, 11-knot boats to be used for both of
these services.
The route and ports of call as well as the freight rates of the com-
pany must be submitted to the Minister of Commerce for approval,
and he may require the company to call at additional ports, provided
the additional calls do not increase the annual voyages more than
3,000 miles.
The contract provides the following amounts per year for the
several services:
1
Trieste-Cattaro Line:
Three voyages weekly
Four voyages weekly.
Five voyages weekly.
Six voyages weekly
Trieste to Spizza..
Trieste to Perveza..
Line and service.
Total annual sub-
vention.
Crowns. Dollars.
680,000
900,000
138,040.
182, 700
1,000,000
1,200,000
203,000
243,600
150,000
30, 450
250,000
50,750
GERMANY AND AUSTRIA-HUNGARY.
97
The contract provides that the State shall advance to the Austrian
Lloyd an amount not to exceed 1,800,000 crowns ($365,400) out of
the subvention of the last four years of the contract for the purchase
of a third steamer for the line between Trieste and Cattaro. The
total advances can not exceed 5,400,000 crowns ($1,096,200) and
nust be repaid without interest in the years 1921 to 1924.
Details as to the operations of the Austrian Lloyd in the years
1908 to 1912 are shown in the following table,¹ which gives the num-
ber and gross tonnage of ships operated by this company, the number
of voyages made in each year on the various services, miles run,
passengers and freight carried, income, expenditures, dividends, etc.:
Items.
1908
1909
1910
1911
1912
Ships:
Number.
Gross tonnage
Number of voyages:
In the Adriatic.
In the Levant and Mediterranean.
In the Black Sea and on the Danube..
60
63
63
68
196, 292
210, 526
213, 876
249, 776
62
223,976
445
568
697
625
751
258
255
262
261
264
123
113
118
132
143
To India..
43
43
43
44
55
To Brazil...
9
9
Special voyages
111
80
104
51
107
Miles run..
2, 112, 029
2, 108, 133
2, 158, 439
2,095, 336
2,399,951
Passengers carried.
Freight carried (tons).
Income...
Expenditures.
Profit
278, 975
1, 109, 754
$1,535, 585
$1,313,916
$221, 668
1, 129, 048
$2, 129, 847
$2, 129, 847
$1,640, 653
$489, 193
376, 951
466, 139
1,317, 180
$2,326, 770
$1, 727, 568
$2, 255, 132
$1, 605, 446
397, 518
1,294, 560
1,351, 706
$2,267, 008
$1,742, 912
508, 140
$599, 202
$649, 685
Distribution of surplus:
$524, 096
To depreciation.
To reserve.
$708, 511
$875, 569
$939, 474
$923, 325
$1,045, 759
$238, 915
$491, 250
$427, 532
$322, 540
Insurance fund.
Reserve fund..
Dividends, per cent.
$1,383, 778
$1,577, 530
$1,793, 294 |
$1,893, 196
$416, 971
$2,006, 558
$102, 062
$535, 080
$524, 065
$748, 158
2.5
6.0
6.5
6.5
7.0
$940, 459
The effect of subventions upon the development and operations of
the Austrian Lloyd has been described in the following terms, in a
treatise entitled "Oesterreichische Schiffahrtspolitik," and published
in 1912:
The Austrian Lloyd (Oesterreichischer Lloyd), established in 1836, is the oldest
and the largest of the Austrian navigation companies. The subsidies received
by the Lloyd from the Austrian Government during the first 10 years of the
present century totaled 97,488,000 crowns ($19,790,000), or nearly three and
one-half times the share capital of the company, which amounts to 28,800,000
crowns ($5,846,400). In spite of the enormous subsidies, however, the Lloyd
made little progress during the decade. The number of its ships decreased by
two, or 4 per cent, but owing to a small increase in the type of the Lloyd's
ships, the total gross tonnage increased 21 per cent; that is, about 2 per cent
per year, on the average. This increase appears quite insignificant, however,
in comparison with the growth of foreign shipping during the same time. The
tonnage of the Hamburg-American Line, for example, increased 310 per cent
during the decade.
The Austrian Lloyd suffers severely from all the evils and disadvantages of
the subsidy policy. Writers on maritime traffic point to this company as a
horrible example of an enterprise bound, fettered, and robbed of its energy by
bureaucracy. Questions of operation, rates, traffic changes, administration, etc.,
have to be approved by the Ministry of Commerce, this complicated system
of management involving a large expenditure. The Lloyd being a semigovern-
mental institution, its freedom of movement is hampered by various personal
influences. Unlike a private undertaking, with an independent initiative, the
Lloyd simply seeks to maintain the contract lines, and has pursued that policy
1 Oesterreichisches Statistisches Handbuch, 31st year, Vienna, 1913, p. 229.
41987°——16——————7
98
GOVERNMENT AID TO MERCHANT SHIPPING.
for decades. It has only as many steamers as are absolutely necessary for the
contract lines; it has no ships for independent traffic. The subsidy makes its
financial position safe, and the Lloyd pursues the old beaten track. No progress
is to be expected under the present conditions-that is, within the limits of its
contract with the Government-notwithstanding all the advantages offered by
its lines, by the geographical position of Trieste, and by the traditional popu-
larity of its ships.
The Indian and East Asiatic services which hold out enormous possibilities
have been exploited but slightly. Some of the ships employed on the lines are
of small tonnage, while the large steamers are few and are not equipped
properly for the carrying of cabin passengers. The Lloyd_contract_prevents
any daring innovations. The Lloyd is similarly bound and fettered even in
the traffic with the Near East, where it once had almost a monopoly, but where
it now has dangerous rivals, and our Levantine trade suffers thereby. In 1904
a line to East and South African ports was established. The line was started
with insufficient means and a faulty program and was abandoned in 1907,
although it appeared promising. The Red Sea traffic was likewise abandoned
to competitors, although the line maintained by the Lloyd in this service inde-
pendently in the years 1886-1888 had given favorable results.
The Lloyd contract of 1907 was prepared by experienced business men.
They tried to save a concern beset by financial difficulties but lost sight of
the needs of ocean traffic. The generous subsidies placed the Lloyd's finances
on a solid foundation. Lloyd shares are quoted higher than ever. A dividend
of 64 per cent was paid in 1910. In the years preceding 1907 the finances of
the Lloyd were in a precarious condition. It was doubtless one of the objects
of the subsidy to bring financial relief to the Lloyd, but this should not have
been its only object-the contract ought to have made provision for a far-
reaching navigation program. The Government, however, concluded a con-
tract providing for a very modest navigation program for the long term of 15
years, a program based on the needs of the moment, without any provision for
the future requirements of increased traffic. The failure of the subsidy policy
may best be seen in the fact that the 6 per cent dividend was taken almost
wholly from the subsidy. It was not due to an increase in traffic.
In marked contrast to the slow and restricted development of the
Austrian Lloyd, with its large subventions, stands the Austro-Ameri-
cana Line, a comparatively new organization that has developed
rapidly and has earned large profits without extensive Government
aid. A short account of the development of this line is given in the
following extract from the book on "Oesterreichische Schiffahrts-
politik":
The gratifying progress of the Austro-Americana, an independent line, offers
a pleasing contrast to the poor results of the subsidy policy in the case of the
Austrian Lloyd and the tramp steamers. It is the only one among the inde-
pendent companies which deserves special mention, as it promises to develop
into an undertaking of great importance. The original company possessed
only eight old, inferior coasting vessels in 1900. At the end of that year the
company absorbed the firm of Cosulich Bros., and in 1903 was reorganized as
a stock company. The corporation then owned 17 modern freight steamers
plying regularly between Austrian and North American ports. In that year
the Hungarian Government made arrangements with the Cunard Co. for the
installation of a passenger line between Fiume and New York. Experience has
shown that freight traffic generally follows the faster and more reliable pas-
senger traffic, and thus the Austro-Americana was compelled to undertake
passenger service in order to save its freight traffic from the competition of the
British line.
In 1904 the Austro-Americana secured the cooperation of the Hamburg-
American Line and the North German Lloyd, and its further progress was thus
made secure. In 1906 the company's fleet was increased to 24, and in 1907 to
27 trans-Atlantic steamers, of 103,507 gross tons. In 1908 the fleet numbered 33
ships, of 135,883 gross tons. No increases were made in the last two years of
the decade.
Considering the numerous obstacles the
progress is certainly without a parallel.
was unable to obtain financial support of
company had to overcome, its rapid
In critical situations the company
Austrian capitalists, and the Govern-
GERMANY AND AUSTRIA-HUNGARY.
99
ment gave it no aid. On the contrary, the Austrian Government granted the
Cunard Co. a concession to establish an emigrant line with Trieste as the
starting point, thus exposing the domestic line to formidable foreign competi-
tion, while the Hungarian Government refused to allow the Austro-Americana
to embark emigrants at Fiume. The success of the company is, therefore,
chiefly the result of private initiative and energy as well as of businesslike
management.
The company took advantage of the old subsidy law of 1894 which granted
navigation bounties for periodical voyages regardless of freight tonnage, and
installed a regular line between Trieste and North America, obtaining a large
part of the traffic between foreign Mediterranean ports and North America.
The company further proved ready to make the most of the suddenly increased
demand for tonnage during the South African War, and again during the
China-Japan War, and the Russo-Japanese War. It was courageous enough
to undertake passenger service on its North American line in the face of
formidable competition.
The success of the Austro-Americana, however, must be considered as an
additional proof of the failure of the subsidy policy. For it has been achieved
not by virtue of, but rather in spite of, the governmental policy which really
hindered the progress of the company by the provisions of the new subsidy
law, which are unfavorable to regular lines, by its indifference, and by its un-
wise action in the emigration question.
Austrian Steamship Co. Dalmatia.-A new mail subvention con-
tract was entered into on December 15, 1910, with the Austrian
Steamship Co. Dalmatia, which is believed to be closely affiliated
with the Austrian Lloyd. A contract between this company and the
Austrian Government, has not yet secured parliamentary approval.
This contract, which was entered into on December 15, 1910, pro-
vides a yearly subvention of 1,000,000 crowns ($203,000)—860,000
crowns ($174,580) for the maintenance of regular lines and 140,000
crowns ($28,420) for postal service. The contract provides for the
following services: Trieste to Curzola, steamer of 500 tons capacity
and 10 knots speed, one round voyage weekly; Trieste to Metkovic,
steamer of 500 tons capacity and 10 knots speed, three round voyages
weekly; Trieste to Arbe to Sebenico, steamer of 300 tons capacity
and 9 knots speed, one round voyage weekly. In addition to the
above services the company agreed to make 85 voyages yearly on 20
routes along the Dalmatian coast.
The company agreed also to build a new steamer of at least 500
tons capacity and 12 knots speed within the first four years of the
contract and to have all new ships built and all repairs made in
domestic yards.
Schedules and stops, as well as freight rates, must be approved by
the Minister of Commerce.
The company is also obliged under this contract to unite with any
steamship company that the Government might designate. It was
further agreed that the president and two members of the board of
directors should be named by the Emperor; that all members of the
board of directors should be Austrians holding residence in Austria;
and that the appointment of the general director of the company
should be subject to the approval of the Minister of Commerce.
The agreement stipulates that the company should set aside yearly
5 per cent for depreciation of ships and docks and 10 per cent for
depreciation of all other equipment and that an insurance fund equal
to 40 per cent of the book value of the fleet should be created, at least
4 per cent of the earnings of the company being set aside yearly for
this purpose.
100
GOVERNMENT AID TO MERCHANT SHIPPING.
The contract runs to the end of December, 1917, but the corpora-
tion has the right a year prior to the expiration of the contract to
demand an extension for five years.
Danube Steamship Co.-An important subvention contract was
entered into July 4, 1892, between the Austrian Government and the
Danube Steamship Co. This corporation was established in 1830
for the operation of steamboats on the Danube and its tributaries.
At the present time it is operating between Regensburg and Sulina.
The maximum length of its routes for passenger service is 2,553
kilometers and for freight service 4,214 kilometers.
The contract of July 4, 1892, was for the period from 1891 to
1900 and called for the maintenance of a passenger route between
Theben and Passau, for which the Government was to grant an
annual subvention of 250,000 florins ($101,500) and an annual ad-
vance of the same amount. The advance was to be repaid to the
Government without interest.
This contract was extended provisionally from time to time during
the period from 1900 to 1911. During this period the following sub-
ventions and advances were paid:
1902...
1903....
1904.
1905.
1906...
1907...
1908..
1909..
1910..
1911...
Years.
Subventions.
Advances.
Crowns. Dollars. Crowns. Dollars.
500,000
101,500
500,000
101,500
300,000
60, 900
300,000
60,900
300,000
60,900
300,000
60, 900
300,000
60,900
300,000
60, 900
600,000
121, 800
600,000
121, 800
1,200,000
243, 600
1,200,000
243, 600
1,200,000
243, 600
1,200,000
243, 600
1,200,000
243, 600
After years of negotiations a new contract between the Austrian
Government and the Danube Steamship Co. was entered into during
July, 1912. This contract runs for 25 years and provides for the pay-
ment of an annual subvention of 1,300,000 crowns ($263,900) upon
the following conditions:
(a) That the company should institute a fast line between Linz and Vienna
and should put into operation on this line in 1911 and 1912 two steamers of
600 and 700 horsepower, respectively, with a speed of 23 kilometers per hour
and a capacity for 1,000 passengers.
(b) That the issuance of boat schedules should be approved by the Minister
of Commerce.
(c) That the operating regulations should be thoroughly revised in con-
junction with the Minister of Commerce.
(d) That the Minister of Commerce should have an unrestricted control
over freight rates and that the company should at the request of the Minister
of Commerce grant specially moderate export freight rates on commodities
in the Serbian, Bulgarian, and Roumanian trade.
(e) That Austrian shipyards should be given the preference in the matter of
new construction and repairs.
(f) That the entire property of the company should be at the disposal of
the Government in time of war.
(g) That the company should carry mail free of charge.
(h) That in the adoption of important principles of accounting the company
should secure the consent and approval of the Minister of Commerce.
GERMANY AND AUSTRIA-HUNGARY.
101
(i) That the Government should have the right to name two members of
the board of directors in case there were not more than eight, and three mem-
bers if the board had more than eight.
(j) That the pension fund should be revised within 40 years.
(k) That the unpaid balance of advances to the company under the former
law should be repaid by an appropriation of 15 per cent of the net profits
available for the stockholders and that the amount unpaid at the expiration
of the new contract should be canceled.
The Danube Steamship Co. has been the recipient of other govern-
mental aid. For example, in April, 1895, this company concluded
an agreement for a period of 20 years with the Government of
Bosnia-Herzegovina, whereby the company acquired all the boats
and equipment owned by the provincial Government and in return
therefor agreed to operate a regular service of boats on the River
Save, on condition that these boats should be used exclusively for the
transportation of agricultural products.
Another agreement providing for State aid was concluded on
December 31, 1906, with the Hungarian Government, in accordance
with which the Danube Steamship Co. operates a local service in
Budapest.
HUNGARIAN BOUNTIES OR SUBSIDIES.
Direct aid in the form of bounties was extended to shipping under
the Hungarian flag for the first time by the law of June 30, 1893,
which provided for two kinds of bounties, namely, purchase bounties
and mileage bounties. These bounties were to be paid only on ships
owned to the extent of at least two-thirds by Hungarian citizens. It
was also provided that the total amount paid in any one year should
not exceed 200,000 crowns ($40,600). The law also granted exemp-
tions from taxation similar to those granted under the Austrian laws
referred to above.
Purchase bounties.-These bounties were paid only on vessels built
of iron or steel in accordance with the requirements of the Veritas
Austro-Ungarico or the British Lloyd, and holding a first-class
rating with either of these two societies. The bounties were to be
paid on new ships engaged in free navigation for a period of 15
years from the date of their launching. (By free navigation is
meant the operation of ships without postal subventions.) The
following table shows the rate of bounties paid during the first year
after the launching of a vessel:
Sailing ships:
Long coasting trade.
Steamships:
Over-seas trade...
Long coasting trade
Over-seas trade....
Class of ship and trade.
Bounty per net ton.
Crowns.
Dollars.
6
1.22
12
2.44
9
1.83
12
2.44
The bounties were reduced by 7 per cent annually after the first
year.
Old sailing vessels or steamers owned by Hungarian shipping
companies at the end of 1892 and not more than 10 years old were
102
GOVERNMENT AID TO MERCHANT SHIPPING.
entitled to the full purchase bounty, less 7 per cent for each year of
age.
The purchase bounty was available also for sailing vessels or
steamers built by or for Hungarian shipping companies within the
six months prior to the passage of the law, as well as for the vessels
engaged in free navigation and belonging to Hungarian companies
holding postal subvention contracts with the State.
Mileage bounties.-The mileage bounty was paid to vessels en-
gaged in the long coasting and over-seas trade, those operating in
the short coasting trade being expressly excluded. This bounty
amounted to only 5 hellers (1 cent) per net register ton per 100 miles
and was paid only for such voyages as were made to places to
which no line in receipt of a postal subvention was obliged to oper-
ate. A further requirement was that the vessels drawing this
bounty should be less than 15 years old.
Special bounties for old sailing vessels.—The law of June 30, 1893,
granted a special bounty amounting to 2 crowns ($0.406) per net
ton on sailing vessels more than 15 years but less than 25 years old,
engaged in the long coasting or over-seas trade, providing they were
on the register at the close of the year 1892. It was required that
these vessels should have a rating not below B-II with the Veritas
Austro-Ungarico, and that the bounties should be paid for not more
than five years from the passage of the law.
The subsidy law of June 30, 1893, was enacted for a period of
10 years, although under certain of its provisions the bounties might
be paid for a period of 15 years. The policy of granting bounties to
free shipping has been continued, but the details of the later laws are
not at hand. The amounts granted annually for bounties of this
character are not large, as is indicated by the following statement,
which shows the annual expenditures in the years 1901 to 1910: 1901,
$2,450; 1902, $2,330; 1903, $11,980; 1904, $6,425; 1905, $7,090; 1906,
$14,355; 1907, $31,125; 1908, $53,565; 1909, $64,185; 1910, $74,536.
Construction bounties.-Bounties on the construction of ships
built in Hungarian yards have been paid since January 1, 1896, and
at the following rates: Iron or steel hulls, $6.09 to $12.18 per net ton;
wooden hulls, $2.03 to $5.08 per net ton; engines and machinery,
$2.03 to $3.05 per ton of material; boilers and pipes, $1.22 to $2.03 per
ton of material.
POSTAL SUBVENTIONS IN HUNGARY.
Royal Hungarian Ocean Navigation Co. Adria.-The principal
steamship company operating under a postal subvention contract
with the Hungarian Government is the Royal Hungarian Ocean
Navigation Co. Adria, popularly known as the Adria.
This company was established in 1882 and until 1891 operated, in
conjunction with the Austrian Lloyd, a number of services that were
subventioned by the Kingdoms of Austria and Hungary. Upon the
terinination of these agreements in 1891 the Adria company made
a separate agreement with the Kingdom of Hungary, and since that
time it has been a purely Hungarian enterprise, just as the Austrian
Lloyd has, since that time, been purely an Austrian enterprise.
Under this contract the Adria company agreed to make a fixed
number of round voyages yearly from the port of Fiume to specified
ports as follows: Glasgow, 18; Leith or one other port on the eastern
GERMANY AND AUSTRIA-HUNGARY.
103
coast of Great Britain, 12; London, 12; Liverpool, 24; Hull or New-
castle, 12; Rouen, or one other port on the north coast of France, 12;
Bordeaux, 12; Spanish or Portuguese ports and then to Marseille
or Cette, 18; Sicily, Malta, and Tunis, 12; Hamburg, by way of
Antwerp, Rotterdam, or Amsterdam, 6; and Brazil and Argen-
tina, 6.
In addition, the Adria company agreed to make without subven-
tion 15 voyages annually with a total distance of at least 46,000 miles,
with Fiume as the starting and ending point.
An interesting feature of the contract was that at the request of
the Minister of Commerce the company should undertake without
subvention any voyage for which three-fourths of the loading
capacity of the ship was assured.
The company agreed also to operate without State aid or subven-
tion at least 2 steamers between Sulina and Constantinople and to
increase its fleet of 10 steamers by 2 additional steamers in the
year 1891, by 10 in 1892, by 3 in 1893, and by 5 more steamers of at
least 1,500 tons gross register in the last 10 years of the contract.
Schedules as well as passenger fares and freight rates were to be
subject to the approval of the Minister of Commerce.
The contract was for a period of 20 years; that is, until December
31, 1911. During this period the Hungarian Government agreed to
pay the company a yearly subvention of 1,140,000 crowns ($231,420)
in monthly installments of 95,000 crowns ($19,285) and to exempt
the steamship Adria from the payment of consular shipping fees.
It was provided further that the Hungarian Government should not
subsidize any other line operating on these routes and that in case
of an increase or extension of routes the Government should give
the Adria the preference.
At least two-thirds of the members of the board of directors, as
well as the president and vice president, must be citizens of Hun-
gary, the latter two to be appointed by the Minister of Commerce.
The agreement of 1891 was modified by a convention of December
11, 1900, in accordance with which the company increased the num-
ber of voyages and acquired 8 new steamers, with a total carrying
capacity of between 33,000 and 38,000 tons. In return for the addi-
tional service required the Hungarian Government extended the
term of the contract to December 31, 1921, and granted an exemption
from all taxation and fees until that time.
Later, however, it was decided that the Government had the right
upon one year's notice to terminate the agreement on December
31, 1911.
At this time the number of subventioned voyages was increased
from 397 to 472 and the annual run to 1,047,190 miles. The service
to Spain was put on a weekly schedule and that to Portugal on a
monthly schedule. Moreover, calls were to be made at Antwerp,
Rotterdam, and Amsterdam. At the request of the Minister of
Commerce, the company undertook for a special subvention of
300,000 crowns ($60,900) to make six voyages annually to North
America.
A new agreement was entered into on October 6, 1911, in accord-
ance with which the company undertook to make, after the year
1912, 32 round voyages annually between Fiume and Marseille; 26
voyages between Fiume and North Africa; 6 voyages between Fiume
·
104
GOVERNMENT AID TO MERCHANT SHIPPING.
and Brazil; and 24 calls at Portuguese ports. For this increased
service the subvention was raised from 1,452,000 crowns ($294,756)
to 2,010,000 crowns ($408,030).
The agreement of the company was still further modified by a
contract under date of August 31, 1912, which stipulated that 12 of
the calls at Portuguese ports should be at Lisbon and Leixos; that
the export tariffs of the two Mediterranean services, namely, the
North African line and the Marseille-Spain line, should be subject
to the approval of the Minister of Commerce; and that the two
steamers then under construction should be employed on one of the
regular lines of the company. In return for these additional services.
the subvention was increased from 2,010,000 crowns ($408,030) to
2,290,000 crowns ($464,870).
Hungarian-Levant Steamship Co.-This company began opera-
tions in September, 1897, on an unsubventioned service between Mar-
seille and Odessa. Later, as a result of an agreement entered into
with the Hungarian Government on May 1, 1898, a line between
Galatz and Levant ports was established. This line was put on a
regular weekly basis in 1912.
In 1911, this company entered into an additional agreement with
the Hungarian Government, providing for the establishment of a
line between Fiume and Australia with eight voyages annually.
Details as to the amount of the subventions received by this com-
pany are not known, but its financial reports show that it received
in subventions in the year 1911, 416,852 crowns ($84,621), and in
1912, 1,005,138 crowns ($204,043).1
Royal Hungarian River & Sea Navigation Co.-This company,
which operates almost exclusively on the Danube River, was es-
tablished in 1895, and has been the recipient of State aid since its
establishment. The first contract was made for a period of 20 years,
during which time the company was to receive an annual subven-
tion of 800,000 crowns ($162,400), which was to be devoted at the
outset to the creation of a reserve fund, and was later to be increased
by 100,000 crowns ($20,300) if the earnings of the company were in-
sufficient to pay a 5 per cent dividend on the capital stock. Deficits
were to be paid out of the reserve fund until that fund should be
exhausted and then by means of advances from the State, which were
to be repaid out of the surplus earnings in the following years.
Another interesting feature of this contract was the provision that
the State should receive one-third of the net earnings between 5 and
7 per cent, and one-half of the earnings in excess of 7 per cent. Since
1901 the Hungarian Government has had the right to take over the
property of the company upon the payment of a sum equal to twenty
times the average net earnings in the best five out of the preceding
seven years, but in no case at an amount less than 240 crowns ($48.72)
per share of stock.
The subventions received by the company in the years 1911 and
1912, according to its financial statements,2 were 900,000 crowns
($182,700) in each year, which would indicate, according to the terms
of the original agreement, that the company in those years at least
could not have paid a 5 per cent dividend without the full subvention
from the Government.
1 Kompass, 1914, Vol. II, p. 1723.
Kompass, 1914, Vol. II, p. 1721.
GERMANY AND AUSTRIA-HUNGARY.
105
Hungarian-Croatian Steamship Co.-This company, which was
established in 1891, has a capitalization of 6,000,000 crowns
($1,218,000) and operates 40 steamers, with a total register tonnage
of 13,500. Since 1901 it has operated, under a subvention agreement
with the Hungarian Government, a regular steamship service in the
eastern section of the Adriatic with Fiume as its home port. For
this service the company has received a yearly subvention of 430,000
crowns ($87,290). Under another agreement with the Hungarian
Government this cvompany maintains regular steamship services
between Fiume and Venice and between Fiume and Ancona, for
which it has received yearly 160,000 crowns ($32,480). Both con-
tracts were made for a period of 15 years; in other words from Jan-
uary 1, 1902, to December 31, 1916.
This company has been remarkably successful. Its report shows
that in the years 1894 to 1900 a 7 per cent dividend was paid; in the
years 1900 to 1908, 10 per cent dividend; in 1909, 6 per cent; in 1910
and 1911, 15 per cent; and in 1912, 16 per cent.¹
¹ Kompass, 1914, Vol. II, p. 1726.
Chapter IV.-SCANDINAVIAN COUNTRIES.
DENMARK.
The merchant marine of Denmark is, according to statistics com-
piled by Lloyd's Register for 1915-16, nearly as large as the merchant
navies of Spain and Greece, Denmark ranking fourteenth among the
nations of the world in respect to merchant shipping. The merchant
marine of Denmark has grown steadily but slowly in the past 24
years. The actual net tonnage under the Danish flag has increased
during this period about 86 per cent, while the potential net tonnage
has increased 171 per cent, the higher increase for the latter indicat-
ing an increasing proportion of steam tonnage.
The development of the Danish merchant marine is indicated by
the following table, which shows actual and potential net tonnage of
Danish shipping at the beginning of each five-year period from 1870
to 1910, as well as for each year from 1911 to 1914. The figures
shown in this table include all ships of 4 tons and upward that are
registered in Denmark but not the shipping registered in the Danish
West Indies, Iceland, and the Faroe Islands.
1870.
1875...
1880...
1885..
1890...
Year.
1895..
1900..
1905..
1910..
1911..
1912...
1913...
1914...
a On Dec. 31.
Including motor ships.
Actual net tonnage.
Total.
Sail.b
Steam.
Potential
net
tonnage.c
178,646
168, 193
10,453
244, 100
204, 732
39,368
24, 466
197,509
51,957
278, 738
199,552
322, 836
353,380
188,923
89, 815
302, 194
189,406
112,788
322, 965
178, 906
144,059
394, 253
146,900
247,353
458, 368
527,770
611, 083
888, 959
461,315
130, 090
331, 225
1, 123, 765
521, 451
109, 394
412,057
1,345,565
513, 981
102, 386
411,595
522, 143
1,337, 171
106, 707
415, 436
1,353, 015
540, 944
119, 478
421, 466
1,383, 876
562,316
128, 388
433, 928
1,430, 172
c Computed on theory that 1 ton of steam tonnage equals 3 tons of sail tonnage.
The figures shown in the above table for sailing vessels, it should
be noted, include motor ships, which are an important item in the
merchant marine of Denmark. The use of motor vessels has devel-
oped rapidly in recent years. On January 1, 1913, motor vessels
registered in Denmark had a total net tonnage of 15,519; on Janu-
ary 1, 1914, 29,598; and on January 1, 1915, 42,361. Many of the
motor vessels are of considerable size, as is indicated by the fact that
on January 1, 1915, there were 10 motor vessels with a total net
tonnage of 30,190 tons, or an average of 3,019 tons.
106
SCANDINAVIAN COUNTRIES.
107
Denmark has been notably successful in the use of the motor ship,
the operation of which is said to be very economical. During the past
year contracts have been let for the construction of large vessels of
this type for the over-seas trade. In this connection the following
extract from Shipping Illustrated of April 1, 1916 (p. 6), is of
interest:
The East Asiatic Co., a leading Danish company, for which the pioneer large
motor ship Selandia was built in 1912, is now pinning its faith entirely to
motor ships. Last year the company owned 13 steamers; now it has none. In
three of the vessels originally driven by steam the engines have been replaced
by motor engines, while the others have been sold as new motor ships became
available. At the beginning of last year the company owned 10 large motor
ships, representing a total of 75,000 tons dead-weight. During the year it took
delivery of five ships, of 47,400 tons dead-weight. In the summer of this year
a motor ship of 10,400 tons dead-weight is to be delivered and next spring
another of the same size. The company's program already provides for the
following new motor ships: Six of 11,800 tons dead-weight between September,
1917, and January, 1920; six of 12,800 tons dead-weight between 1918 and 1920;
six of 10,000 tons dead-weight between 1918 and 1920. Two of the ships will
have 3,300 horsepower, 12 will have 4,000 horsepower, and 6 ships 5,300 horse-
power. Other Danish owners are also known to be ordering numbers of motor
ships, and, according to the Copenhagen papers, one firm (presumably Messrs.,
Burmeister & Wain) has received orders for about 50 motor ships, and will
thus be fully occupied until the end of 1921. Economy of fuel, labor, and space
are points considered by Scandinavian countries to be in favor of motor en-
gines. The large ships only consume about 10 tons of oil a day, and therefore
vessels trading with countries where oil is plentiful, as in the East and on the
Pacific coast of North America, can ship enough oil fuel for a voyage around the
world. Swedish and Norwegian owners support the Danish companies in their
belief in motor ships, but their feelings have not so far met universal indorse-
ment. The Times (London) says the experience of British owners with motor
vessels has been far from uniformly favorable.
The policy of Denmark with respect to State aid for merchant
shipping is not particularly illuminating. The financial aid ex-
tended by the Danish Government has not been extensive, but it can
not be said that the development of Danish shipping has been re-
tarded on this account, nor, on the other hand, can it be stated that
the increase in Danish shipping is due in any important degree to
such direct governmental aid as has been extended to it. Some of
the most important subsidies to steamship companies have been given
primarily for the development of agricultural exports to Great
Britain.
INDIRECT AID.
Reservation of coasting trade.-The coasting trade of Denmark
and of Iceland and the Faroe Islands is not reserved to vessels flying
the Danish flag, but is open to the vessels of all nations that grant
reciprocal privileges to Danish shipping. The coasting trade of Den-
mark can not be regarded as extensive, and its monopolization by
Danish ships would not be a very important privilege.
Exemption from import duties.-Denmark has long pursued the
policy of granting free admission to foreign-built ships of all kinds,
including the necessary equipment therefor.
The customs tariff of Denmark has for some years provided indi-
rect aid for the domestic shipbuilding industry by granting a draw-
back, not to exceed 2 per cent of the selling price of all vessels built
in Danish shipyards, in the case of duties paid on imported materials
used in the construction of such vessels.
108
GOVERNMENT AID TO MERCHANT SHIPPING.
Refund of wharfage charges.-It was the policy of the Danish
Government for many years to refund wharfage charges paid at the
port of Esbjerg, which is under the control of the Government, by
vessels operated on the subsidized lines between Esbjerg and Grimsby
and between Esbjerg and Parkeston. The reimbursement of wharf-
age charges, which was a substantial benefit, has not been made since
the close of the fiscal year 1911-12, when the subsidies to the above-
mentioned lines were discontinued.
Preferential railway rates.-Strictly speaking, no preferential rail-
way rates are granted by the Danish State Railways, which operate
most of the mileage of the country. The railroad freight tariffs are
so adjusted, however, as to provide a progressive reduction in the
rates per mile in proportion to the length of the haul and in this way
to place the remote localities in a more favorable position to export
than would be the case without the lower rates.
No preferential railway rates are made on goods shipped over
favored lines of steamships, as is the case in Germany with respect
to the German East African Line and the German Levant Line.
Regarding the policy of the Danish Government in regard to rates
on the Danish State Railways, the following extract from a report
of the British Minister at Copenhagen under date of October 11,
1901, is of interest:¹
There are no combined "preferential rates," in the proper sense of the
term; that is to say, made especially low in order to place Danish products
abroad at unduly low prices by means of particularly moderate combined
freights over the State Railways and by the lines of steamers subsidized by
the Government. The rates to the ports appear to be merely the ordinary ones
under the " progressive" system of reduced rates. Moreover, this is shown
by the fact that no through bills of lading would appear to be issued from
any inland places to foreign ports. It would be against all the principles on
which the Danish State Railways are worked for any preferential rates
to be granted on them. They yield
ardly any profit to the State and are
purposely managed merely to pay their way while yielding fair interest on
the capital invested. In fact, they are worked by the Government entirely
for the real benefit of the public who make use of them. I would, however,
call attention to the existence of combined freights by the Danish subsidized
steamers from the Government port of Esbjerg to London via Parkeston,
which, therefore, implies the granting of presumably exceptionally low freights
by the Great Eastern Railway in England.
DIRECT AID.
Bounties or subsidies. For many years the principal direct aid
extended by the Danish Government was granted to the United
Steamship Co. of Copenhagen for the operation of regular lines of
boats between Esbjerg and Grimsby and between Esbjerg and
Parkeston. These boats were provided with refrigerating facilities
and used chiefly for the transportation of Danish dairy and farm
products. The object of these subsidies was to provide not only
adequate facilities for this trade, but also low transportation rates,
inasmuch as the agreement between the steamship line and the
Danish Government provided for a 20 per cent reduction in rates
on all farm products. These bounties should, therefore, be regarded
more in the nature of export bounties than of shipping bounties.
The ships operating on these lines were reimbursed for wharfage
dues at Esbjerg. These refunds proved to be a larger benefit than
1 Report of Select Committee on Steamship Subsidies, Dec. 3, 1902, pp. 225-226.
SCANDINAVIAN COUNTRIES.
109
the subsidies themselves, as is indicated in the following table, which
shows the amounts paid in subsidies and in refund of port dues on
each of these lines in the period from 1903-4 to 1911–12:
Esbjerg-Parkeston line. Esbjerg-Grimsby line.
1903-4.
1904-5.
1905-6..
1906-7.
1907-8...
1908-9...
1909-10...
1910-11..
•
1911-12.
Years.
Subsidy.a
Refund of
port dues.b
Subsidy.a
Refund of
port dues.b
$32, 160
$37,627
$16, 080
32, 160
$11, 944
41, 699
16,080
32, 160
11, 954
36, 624
16,080
32, 160
12, 099
37,593
16, 080
32, 160
13, 406
44, 294
16,080
15, 220
32, 160
48, 385
16,080
17,444
32, 160
41, 535
16,080
16,735
32, 160
42,900
16,080
32, 160
17, 617
48, 361
16, 080
17,960
a Converted from kroner to dollars at the rate of $0.268 per krone.
b Converted from pounds sterling to dollars at the rate of $4.824 to the pound.
The policy of granting subsidies and making refunds of port
charges on the ships operated on the two lines from Esbjerg to Eng-
lish ports was discontinued at the close of the fiscal year 1911–12.
According to a report from the American Legation at Copenhagen
under date of May 9, 1912, these grants were withdrawn in order
to avoid a possible countermove on the part of the English Govern-
ment, which it was feared might regard the subsidies as giving the
exports of Denmark a special advantage in the English market over
English colonial products."
Since the discontinuance of the subsidies for the lines from Esbjerg
to Parkeston and Grimsby the only subsidies paid by the Danish
Government have been for a line between Kalundborg and Aarhus
and for the line between Frederikshavn and Goteborg. The former
line operates between ports on the Danish coast, while the latter
is between a Danish and a Swedish port. In both cases the agree-
ment with the Danish Government provides for the maintenance of
daily service, the compensation consisting of the payment by the
Danish Government of any deficit due to lower freight rates.
The following table shows the amounts granted by the Danish
Government for both of these services in the period from 1903-4
to 1912-13:
Subsidies b paid to-
Subsidies paid b to—
Years.
Kalund-
borg-
Aarhus
line.
Freder-
ikshavn-
Goteborg
line.
Years.
Kalund-
borg-
Aarhus
line.
Freder-
ikshavn-
Goteborg
line.
1903-4..
$10,888
$5, 509 1908-9..
$3,213
1904-5.....
1905-6.
1906-7.
1907-8..
$23, 314
9,503
3,637
1909-10...
3,213
23, 314
7,771
4,940
1910-11..
4,279
23, 314
5, 620
3,647
20, 541
1911-12..
6, 430
15,871
23,314
1912-13.
13,396
15, 273
Ombinations.
a Investigation of Shipping
Marine and Fisheries, vol. 3, p. 36.
• Converted from pounds sterling to dollars at the rate of $4.824 to the pound.
Report of the Committee on the Merchant
110
GOVERNMENT AID TO MERCHANT SHIPPING.
Postal subventions.-The only postal subventions paid by the Dan-
ish Government are for the lines operated between Copenhagen and
the island of Bornholm, which lies off the coast of Sweden, and
between Copenhagen and Iceland. These subventions are small, as
is indicated in the following table, which shows the amounts paid
for each service for the fiscal years 1903-4 to 1912–13.
1903-4.
1904-5..
1905-6.
Postal subventions.a
Postal subventions.a
Years.
Copen-
hagen-
Copen-
hagen-
Years.
Bornholm Iceland
Copen-
hagen-
Bornholm
Copen-
hagen-
Iceland
service.
service.
ser. ice.
service.
$22, 900
$10, 878
22, 818
17,415
1908-9.
1909-10.
...
22,818
17,415
1910-11.
$22,837
22,818
22, 818
22, 818
17,415
1911-12.
22, 880
17,960
1912-13..
72, 592
73,966
$19,296
20, 502
22,518
23,975
23, 314
1906-7.
1907-8.
a Converted from pounds sterling to dollars at the rate of $4.824 to the pound.
Steamship companies.-The most important steamship company
under the Danish flag is the United Steamship Co. of Copenhagen
(Det Forenede Dampskib-selskab). On January 1, 1913, this com-
pany operated 117 steamers, with a total gross tonnage of 157,192, or
more than three-eighths of the total steam tonnage under the Danish
flag. This company has several boats of 10,000 gross tonnage and up-
ward. One authority,' writing in 1903, states that much of the success
of Denmark in the over-seas shipping is due to the fact that the mer-
chant marine is controlled largely by one company and that this con-
centration of control has brought about efficient as well as economical
management and operation. The success of this company is shown
by. the fact that in the first 33 years of its existence-that is, from
1866 to 1899—the average annual dividend was 73 per cent. The
results since that time have been on the whole even greater.
NORWAY.
Norway ranks fourth among the maritime nations in total mer-
chant tonnage and first in tonnage per capita of population. The
growth of the Norwegian merchant marine since 1870 has been re-
markable. In 1870 the steam tonnage of Norway amounted to only
13,715 net tons; in 1900 it amounted to 505,443 net tons; and in 1912
to 1,084,112 net tons.
The increase in steam tonnage has not, however, been coincident
with a decline in sail tonnage. Although the sail tonnage of other
countries decreased very considerably in the period from 1860 to
1890, that of Norway continued to increase. Since 1890, however, the
sail tonnage of the Norwegian merchant marine has declined in a
marked degree, but in 1912 still constituted more than one-third of
the total tonnage under the flag of Norway.
9
The following table shows the actual and potential net tonnage of
the Norwegian merchant marine at the beginning of each five-year
period from 1870 to 1910 and in the years 1911 and 1912:
1 Greve.
Seeschiffahrts-Subventionen der Gegenwart, p. 104.
SCANDINAVIAN COUNTRIES.
111
Years.a
Actual net tonnage.b
Potential
net ton-
Total.
Sail.c
Steam.
nage.d
1870...
1875...
1,022, 515
1,008,800
13,715
1,049, 945
1880...
1,395, 199
1,349, 234
45,965
1,487, 129
1885..
1,518, 658
1,460, 596
58,062
1,634, 782
1890..
1,563, 020
1,448, 912
114, 108
1,791, 236
1895.
1,705, 699
1,502, 594
203, 115
2, 111, 939
1900...
1,604, 965
1,218, 913
321, 052
2, 182, 069
1905
1, 508, 118
1,002, 675
505, 443
2,519, 004
1910...
1,478, 094
813, 864
664, 230
2,806, 554
1911..
1,527,727
630, 287
897, 440
3,322,607
1912...
1,646, 030
738, 197
987, 832
3,701, 693
1,717, 100
632, 988
1,084, 112
3,885, 324
a On Dec. 31.
c Not including motor ships.
b Including ships of 4 net tons and over.
d Computed on theory that 1 ton of steam tonnage equals 3 tons of sail tonnage.
Norway has for a number of years granted small shipping sub-
sidies, but the development of its merchant marine can not be at-
tributed in any considerable degree, if at all, to this form of Govern-
ment aid. The causes for the rapid growth of the Norwegian mer-
chant marine are to be found rather in (1) the geographic and
economic situation of the country; (2) the seafaring ability of its
people; (3) liberal navigation laws; (4) low wage scale; and (5)
low cost of ships.
In regard to the geographic and economic situation of Norway,
attention should be called to Norway's proximity to Great Britain,
Germany, and Russia, to and from which countries large quantities
of bulk freight are transported. For example, the extensive products
of the lumber, wood pulp, and paper industries in Norway are sold
to a large extent in England, from which country large quantities of
coal are brought on the return voyage.
As to the seafaring ability of the Norwegian people little need be
said, since the Norwegian sailor is almost universally regarded as
very efficient.
The navigation laws of Norway have been, and still are, in many
respects more liberal than those of a number of other countries.
During the past two decades a large amount of British-owned ton-
nage has been registered under the Norwegian flag because of the
greater liberality of the navigation laws of Norway.¹
1
The Norwegian laws are said to be more liberal than the British
in the following respects:¹
1
First. In permitting more cargo to be carried. Although Norway requires
vessels to have load-line marks, it is not so strict in this respect as Great
Britain; at least the British Board of Trade does not recognize the Norwegian
load-line marks as equivalent.
Second. In allowing smaller crews. This may be due, however, to the effi-
ciency of the Norwegian sailor. It is probably true that a ship manned with
Norwegians requires a smaller crew than a ship manned with sailors of other
nationalities.
In regard to wages, those paid to Norwegian sailors are lower than
the wages demanded by sailors of other leading maritime countries.
¹ Annual Report of Commissioner of Navigation, 1899, pp. 15–16.
112
GOVERNMENT AID TO MERCHANT SHIPPING.
As to low cost of ships, it should be stated that because of its large
supplies of timber Norway can produce very cheaply the wooden
sailing vessels which make up a large part of its merchant fleet, while
much of its steam tonnage has been purchased abroad at low rates.
It appears to be the practice of the larger British steamship lines
to dispose of their ships after they have been used for 10, 15, or 20
years. These ships have found a ready market in Norway, where
they can be used to good advantage, especially on the short voyages
made by a great majority of the Norwegian ships.
The aid given to merchant shipping by the Norwegian Govern-
ment is of three principal kinds:
(1) A reimbursement for import duties paid on foreign materials
used in the construction and repair of ships.
(2) An annual subsidy to several national steamship companies to
enable them to maintain steamship routes in districts where such com-
munications are considered necessary, but where a steamship line
could not be maintained to the extent required without governmental
assistance.
(3) Postal subventions.
INDIRECT AID.
Reservation of coasting trade.-So far as can be ascertained the
coasting trade of Norway is open to the ships of all countries except
Sweden. The Norwegian coasting trade is not, however, extensive;
in fact, it is in general so inadequate as to require Government aid
for the maintenance of regular coastal communications.
Reimbursement for import duties. Instead of granting shipbuild-
ers exemption from duties on imported raw materials used in ship
construction, it has long been the practice in Norway to pay fixed
sums as reimbursement for duties paid. Such payments are, there-
fore, not to be regarded as construction or shipbuilding bounties,
although they may slightly exceed the amount of duties actually
paid.
These payments are made in accordance with article 12 of the Nor-
wegian customs tariff. The tariff of 1905, which was in operation
until July 1, 1915, provided that reimbursement for duties paid on
shipbuilding material should be made in the case of every vessel of
more than 50 tons gross register constructed in Norwegian shipyards
for foreign as well as for Norwegian account. Instead of being
given in the form of a drawback, this so-called reimbursement con-
sisted of the payment of flat sums per gross register ton of vessel.
For steamships with main engines and boilers installed in Norwegian
shops the rate was 2 kroner ($0.536) if the hull was of iron and
steel and 1 krone ($0.268) if the hull was of wood. For steamships
without main engines or boilers, but otherwise completely fitted out,
and for all sailing vessels built in Norwegian yards the rate was 1.50
kroner ($0.402) per gross register ton in the case of iron or steel ships
and 1 krone (($0.268) in the case of wooden ships.
The tariff law of July 1, 1915, changed the forms of reimburse-
ment. Instead of a flat rate per gross register ton of vessel, an
amount equal to a certain percentage of the purchase price is granted.
This grant is given not only for new construction, as in the former
SCANDINAVIAN COUNTRIES.
113
tariff law, but also for repair work costing more than 1,000 kroner
($268).
The reimbursement amounts to 2 per cent of the purchase price in
the case of new steamships of more than 300 gross tons and 1 per cent
for new steamships of 50 to 300 gross tons and for new sailing ves-
sels of at least 50 gross tons. These rates are reduced by one-third
in the case of steamships equipped with boilers and machinery in
foreign shipyards.
*
Reimbursement for repair work in Norwegian shipyards is made
only in the case of vessels of more than 300 gross tons and only when
the cost of repairs, exclusive of port charges, exceeds 1,000 kroner
($268). The payment is equal to 1.5 per cent of the cost of repairs.
The amount granted as reimbursement in any one year is compara-
tively small, since the shipbuilding industry in Norway is not highly
developed and the rate of reimbursement is low. The following
statement, taken from a recent British report, shows the payments
made in the years 1901-2 to 1910-11, inclusive:¹ 1901-2, $17,646;
1902-3, $21,885; 1903-4, $26,410; 1904-5, $27,817; 1905-6, $26,980;
1906-7, $27,209; 1907-8, $27,870; 1908–9, $31,326; 1909-10, $14,507;
1910-11, $21,680.
Preferential railway rates. Under date of July 23, 1912, the
American vice consul at Christiania reported that the Norwegian
steamship lines do not have any agreements with the railroads
whereby they secure a preferential or more favorable through rate.
"All the principal railroads belonging to the Norwegian State, and
thus under official control, such an agreement would be absolutely
impossible."
DIRECT AID.
Subsidies for trade routes.-Norway has for many years (at least
since 1876) paid subsidies for the maintenance of special trade routes
under contracts for a term of years providing for the payment of
fixed annual sums.
The great majority of these subsidies are paid to lines operating
between Norwegian ports and, in most cases, for services to remote
sections of the country that would not otherwise be self-supporting.
They are made for the purpose of maintaining means of communi-
cation between the several parts of the Kingdom rather than of
developing a merchant marine.
An examination of the subsidies appropriated for the 15 months'
period between April 1, 1908, and June 30, 1909, shows that out of a
total expenditure of 1,905,000 kroner ($510,540) 1,405,000 kroner
($376,540) were paid to lines operating between Norwegian ports.
On 18 routes the grant was less than 7,500 kroner ($2,010) per
annum.
The principal subsidies granted for Norwegian routes in the period
from April 1, 1908, to June 30, 1909, are shown on a 12 months' basis
in the following table:
1 Great Britain: Report on Bounties and Subsidies in respect of Shipbuilding, Shipping,
and Navigation in Foreign Countries, 1913, p. 34.
41987-16-
-8
114
GOVERNMENT AID TO MERCHANT SHIPPING.
Steamship companies.
Annual subsidy.
Route.
Kroner.
Equivalent
in dollars.
Bergen Steamship Co..
Nordenfjeld Steamship Co.
Vesteraalen Steamship Co….
Tromso Amt's Steamship Co.
Salten Steamship Co.
8::
Helgeland Steamship Co.
Fosen Steamship Co..
Inderherred Steamship Co.
Namdalen Steamship Co.
Owners of steamship Torghatten..
(Trondjhem-Tromso.
Bodo and Nordre Helgeland; Bodo and
Rost; on Salten, Ofoten, and Lofoten.
In Lofoten and Vesteraalen.
Hammerfest, the Vestfinmarksvar, Por-
sangerfjord, and Lakesfjord.
On Helgeland fjord and island districts...
(Trondjhem, Hitteren, Froien, the Fro
Islands and Halten; also on the Hev-
nefjord and Austfjord and the Snildfjord.
On Namdalen fjord and island_districts..
On Bindalen, Vega, the Velfjord, etc…….
Trondjhem-Hammerfest.
Bergen-Vadso.
240, 200
64,374
Hammerfest-Vadso..
On fjords of Sonjen-Andenes and Tromso
Amt; also on Ŏfoten.
163,000
43, 684
127,000
34,036
120,000
32,160
79, 200
21, 226
76,000
20,368
50,000
13, 400
36,000
9, 648
36,000
9, 648
Annual subsidy.
Routes.
Kroner.
Equivalent
in dollars.
Trondhjem-Bergen-Stavanger-Newcastle (England)
Norway-Cuba-Mexico-South America….
Christiansand (Norway) to Frederikshavn (Denmark).
Norway and Spain.
Eastern and western Norway, the Faroe Islands, and around the whole of Iceland.
170,000
45,560
100,000
26, 200
80,000
21, 449
40,000
10, 720
་
10, 000
2,680
a Not specified.
The total amount expended yearly for special trade-route subsidies
is not large, the greatest amount appropriated for this purpose in
any one year being only 2,095,840 kroner ($561,685), in the fiscal
year 1913-14. The following table shows the amounts expended in
the fiscal years 1901-2 to 1913–14:
Trade-route subsidies.
Year.
Kroner.
Equivalent
in dollars.
Trade-route subsidies.
Year.
Kroner.
Equivalent
in dollars.
1901-2...
1902-3...
1,215,796
1,247, 451
325, 833
1908-9...
1,909, 744
511, 881
331, 317
1909-10..
1,597, 378
428, 097
1903-4..
1, 243, 114
333, 155
1910-11...
1,663, 362
1904-5.
445, 781
1,223, 443
327,883
1911-12...
1,755, 688
470, 524
1905-6.
1, 220, 363
327,057
1912-13..
2,016, 772
540, 495
1906-7.
1907-8.
1,220,207
1,354, 128
327, 015
362, 906
1913-14.
2,095, 840
561, 685
These subsidies are subject to the following general conditions:¹
(a) That the Government finds that the steamships are kept in a proper con-
dition as to hull and engine, as well as to the crew; that their routes are deter-
mined according to practical principles with adequate rates.
(b) That the steamships carry on the transportation of the mail as well as
the bringing on board and putting ashore of the same in the routes at such
terms as had formed the basis for the calculation of the eventual subsidy.
(c) That, if required by the Department of Public Works, the companies are
bound to go on running the routes for a period of three months after the
1 Annual Report of Commissioner of Navigation, 1909, pp. 241–242.
SCANDINAVIAN COUNTRIES.
115
expiration of the financial year, receiving for this service a compensation cal-
culated upon the basis of the compensation originally granted.
(d) That whenever such should be required by the Department of Public
Works, an exposé of the bookkeeping, financial conditions, and exploitation of
the steamships, embracing every desired particular, should be furnished, and
that the appointment of the auditor of the companies or, where there are more
than one, of one of them be submitted for approval to the Department of Public
Works, if required by the latter.
(e) That the amounts laid by for reserve and boiler fund should not be
employed for other purposes, and that, in the case of discontinuation of a sub-
sidized route, the said fund may, by the decision of the King, be turned over to
the treasury.
In certain cases special conditions are imposed, such as the follow-
ing:
That no interest shall be paid to the shareholders until the duty of the com-
pany shall be paid.
That the amount of 500 kroner ($138) be laid by for reserve and boiler
fund.
It is apparent from the above statement of conditions that the
Norwegian Government exercises a large measure of control over the
affairs of the subsidized lines. This idea is brought out even more
clearly in the contract providing for a subsidized service from
Christiania to Cuba, Mexico, and the ports of the United States in
the Gulf of Mexico. This contract is reproduced in full in Appendix
A of this report, but it might be well at this point to refer to some
of its provisions.
Article 4 provides that two ships shall be maintained in this serv-
ice. The ships must be approved by the Department of Public
Works. If new ships are built, "Norwegian workshops shall be
employed by preference, if no serious loss of time or higher expenses
should be thereby incurred."
Article 6 provides that "freights for forwarding goods and pas-
sengers shall be moderate and subject to the department's control,"
while articles 7 and 8 provide that parcel post and other mail matter
shall be forwarded free of charge if required by the postal admin-
istration and officials carried free of charge when traveling on ac-
count of subsidy or postal interests.
Considerable control over the accounts of the subsidized lines is
called for by article 11, which provides that the steamship owner
shall make reports at periods fixed by the department "on the state
of his accounts and the running of the route, as well as all other
information which might be desired.'
""
The contract does not call for a fixed annual subsidy, article 13
merely providing that "there shall be granted to the owner a yearly
subsidy of up to 100,000 kroner ($26,800), payable in quarterly in-
stallments." The amount granted each year is not more than enough
to cover any deficiency in operation within the limit specified. Arti-
cle 13 of the contract also provides that in determining the amount
of subsidy the following items shall be treated as expenditures: (1)
Actual operating expenses; (2) interest on loans; (3) 5 per cent on
paid-up capital stock; (4) 7 per cent on original cost of vessels to
cover depreciation and extraordinary repairs.
Postal subventions. Subventions for the carriage of mails on
specified steamship routes have long been granted by the Norweigan
Government. For the most part these grants are for routes between
116
GOVERNMENT AID TO MERCHANT SHIPPING..
Norwegian ports. Because of the topography and the sparsely set-
tled condition of Norway and of the fact that many localities are
situated on or adjacent to the numerous fjords, it is much more con-
venient as well as more economical to use water routes than land
routes. Payments for the carriage of mail on such routes may there-
fore be regarded in the same light as expenditures for the rural free
delivery mail service in the United States.
1
The most recent data available on the amount expended by Norway
in postal subventions are to be found in the budget of 1908-9.1 For
the period of 15 months between April 1, 1908, and June 30, 1909, a
total of 2,096,225 kroner ($561,788) was appropriated, this being at
the rate of 1,676,980 kroner ($449,431) per year. This appropriation
was for 105 specified routes, for 32 of which the annual subvention
was less than 1,000 kroner ($268).
The only large items in the appropriations for the period of April
1, 1908, to June 30, 1909, were the following:
Routes.
Subventions
for 15
months.
Subventions for 12
months.
Principal mail routes.
Christiania-Bergen.
Christiansund-Frederikshavn.
Bergen-Newcastle.
Trondjhem-Bergen-Newcastle
Trondjhem-Christiansund-Batnfjordoren
Tromso Amts fjords....
·
Kroner.
Kroner.
Equivalent
in dollars.
586,500
469, 200
125, 746
369, 625
295, 700
79, 248
166, 812
133, 450
35, 765
93,750
75,000
20, 100
52,500
42,000
11,256
48,000
38, 400
10, 291
Details are lacking as to the routes included in the item of "prin-
cipal mail routes," for which is shown more than one-fourth of
the total amount paid in subventions. The largest specified sub-
vention is for the route between Christiania and Bergen, both Nor-
wegian ports, but this amounts to only $79,248 per year.
The form of mail contract in general use reads as follows:2
1. The steamship undertakes, to the extent fixed by the postal administra-
tion, the transportation of the mail within her
tween
route
be-
2. The route of the steamship is subject to the approval of the postal admin-
istration and must be kept published, at least by way of extracts, in some
periodical of communications designated by the postal administration. (p. t.
Norges Communicationer samt Post- og Telegrafväsen.")
3. The captain of the steamship takes over any postal matter which may be
handed over to the steamship for transportation, keeps the same under custody
on board, and sees to its delivery to the postal functionaries in the places of
the route where it has to be landed. He also has to keep under custody and
distribute such letters as might be found deposited in the postal box affixed on
board.
4. The ship's owners have to take care of and to defray the expenses con-
nected with the carrying on board and ashore of the mail (i. e., the transporta-
tion between the ship and the landing place).
5. The mail has, while on board, to be kept in a locked closet.
6. The owners of the steamship have to indemnify the postal administration
for any losses or expenses incurred by the latter in consequence of occurrences
¹ Entire budget is given on pp. 242 to 244 of Annual Report of Commissioner of Naviga-
tion for 1909.
2 Reproduced from Annual Report of Commissioner of Navigation for 1909, p. 244.
SCANDINAVIAN COUNTRIES.
117
for which the board of directors or the captain of the steamer or any other
persons employed in the owners' service may be responsible.
7. The captain of the steamship has, as far as possible, to see that no mail
be transported by the steamer without having passed through the hands of the
postal administration.
8. The postal functionaries are transported free of charge when traveling in
the service of the postal administration; the same applies to effects belonging
to said administration, such as mail bags, mail trunks, etc.
,
9. As compensation for the above-mentioned transportation of mail, the
postal administration pays to the owners
dating from
such
compensation to be paid by quarterly installments upon presentation of accounts
certified by the postmaster at
Should an interruption occur in the running of the ship on account of
damage suffered by the latter or for other reasons not dependent on the postal
administration, without the ship's being replaced by another steamship ap-
proved by the postal administration, a proportional reduction has to be made
in the above-mentioned yearly compensation.
10. When running in the above-mentioned route, the steamship is entitled to
carry the postal flag.
11. The present contract remains in force until further notice, and may be
terminated by either of the parties with notice. In the case of nonfulfill-
ment of the contract by the owners the postal administration may, however,
terminate the same without giving any notice.
Christiania, the
189--.
The Royal Norwegian Government Department of the Interior. Postal Ad-
ministration.
SWEDEN.
While the merchant marine of Sweden is little more than one-half
as great as that of Norway, it is, nevertheless, important, and ranks
ninth among the merchant navies of the world, being larger than the
merchant navies of Russia, Austria-Hungary, Greece, Spain, and
many other countries. The merchant shipping of Sweden, measured
in net tons, was in 1914 more than two and a half times as great as
in 1870. The growth of the merchant shipping of Sweden has been,
on the whole, gradual, as is indicated in the following table, showing
the net tonnage of registered sailing and steam vessels of 20 tons and
upward at the beginning of each five-year period from 1860 to 1910,
and also for the years of 1911, 1912, 1913, and 1914:1
1870....
1875...
1880..
1885..
1890.
1895.
1900...
1905..
1910...
1911...
1912...
1913...
1914 c.
Years.a
a On Dec. 31.
Actual net tonnage.
Potential
net
Total.
Sail.
Steam.
tonnage.b
346, 863
319, 247
27,616
507, 049
402,095
424, 042
83,007
542, 642
673, 063
461, 593
81,049
517, 061
703, 740
406, 910
110, 151
510,947
737, 363
369,680
141, 267
483,003
793, 481
301, 727
181, 276
613, 792
845, 555
288, 687
325, 105
723, 089
1,264, 002
263, 425
459, 664
769,985
1,642, 417
176, 912
593, 073
765,068
1,956, 131
154,968
610, 100
805, 386
1,985, 268
153, 827
651,559
873, 206
2, 108, 504
151,867
721, 339
901, 134
2, 315, 884
151, 798
749, 336
2,399, 806
> Computed on theory that 1 ton of steam tonnage equals 3 tons of sail tonnage.
c Preliminary figures.
The development of the merchant marine of Sweden can be attrib-
uted in only a small degree, if at all, to Government assistance of
1 Statistik Arsbok för Sverige, 1915, p. 140.
118
GOVERNMENT AID TO MERCHANT SHIPPING.
any sort, but is due rather to the increased industrial activity of the
country in recent years, particularly in the production for export
of butter, wood pulp, paper, iron ore, etc.
INDIRECT AID.
Reservation of coasting_trade.-The coasting trade of Sweden is
not reserved to ships under the Swedish flag. It is open to the
ships of all countries except Norway. It may be said, however, that
the coasting trade of Sweden is not important, so that little advan-
tage could accrue to Swedish shipping even if it did monopolize the
coasting trade of the country.
Exemption from import duties.-Sweden has long pursued the
policy of "free ships." The present law also provides that all vessels
of more than 40 net register tons shall be exempt from duty, while
iron vessels of less than 40 net tons shall be dutiable at the rate of
10 per cent ad valorem.¹
Drawbacks are allowed on all imported materials used in the con-
struction, alteration, or repair for foreign account, in Swedish ship-
yards, of any vessel of more than 40 net tons and of iron vessels of
5 to 40 net tons.2
Preferential railway rates.-Under date of July 9, 1901, the
British Minister at Stockholm reported as follows regarding the
matter of railroad rates: 3
No so-called "preferential rates appear to exist to assist the exportation
either of Swedish industrial or agricultural products. Nor are there, as in
Germany, any combined low preferential rates by rail (either on the State
or private railways, freights on both being under Government control) or by
sea (on subsidized lines of steamers). The Swedish railways are, however,
reported to be at present granting lower rates than usual for the conveyance
of certain materials required in the iron trade which is just now in a somewhat
depressed state.
It is to be remarked that all railway freights in Sweden, both on the State
and private lines, appear to be about a half those charged for somewhat similar
freight services in the United Kingdom. The maintenance of such moderate
transport rates is, naturally, of considerable assistance to the Swedish iron
industries by enabling them to place their products at small cost in the coast
ports for exportation.
On May 6, 1912, the American consul general at Stockholm made
the following statement regarding preferential railroad rates:
In reply to this question, the only arrangement of this nature is the one which
exists between the State railroads and the East Asiatic Steamship Co., to the
effect that goods may be shipped and freight rates quoted from any inland city
or town in Sweden to the Far East.
Loans to ship owners.-A new policy for Government aid, so far
as Swedish shipping is concerned, was instituted by a law of 1903,
which established the "shipowners' fund" (Rederilane-fonden).
The object of this fund was to provide loans at low rates of interest
and on favorable terms to Swedish steamship companies. The
original amount of the fund was fixed at 5,000,000 kronor ($1,340,-
000), but this was increased in 1905 to 10,000,000 kronor ($2,680,000),
and in 1907 to 15,000,000 kronor ($4,020,000).
?
1 Tariff of Dec. 1, 1911, arts. 1020 and 1021.
2 Customs ordinance of June 9, 1911, art. 12.
8 Report of British Select Committee on Shipping Subsidies, Dec. 3, 1902, Appendix 1,
p. 209.
SCANDINAVIAN COUNTRIES.
119
The terms on which loans are granted vary with each loan, but a
common stipulation is that vessels for which loans are made shall
be built in Sweden. The fact that the fund was increased within
four years from 5,000,000 to 15,000,000 kroner would seem to indi-
cate that this form of Government aid is quite popular and is render-
ing substantial assistance to Swedish shipowners. One of the first
borrowers, it is reported, was the Swedish East Asiatic Co., which
secured a loan of 2,000,000 kroner ($536,000).
DIRECT AID.
Bounties and subsidies.—From 1886 to 1891 the Swedish Govern-
ment paid an annual subsidy of 25,000 kronor ($6,700) to the Ves-
tervik-Libau Steamship Co. for the maintenance of regular service
between Sweden and Russia. So far as can be ascertained this was
the only subsidy paid prior to 1906.
Since 1906 a number of contracts providing real subsidies have
been entered into by the Swedish Government with the following
Swedish lines:
North Star Steamship Co. (Rederiaktiebolaget Nordstjernan).
Swedish East Asiatic Co. (Svenska Ostasiatiska Kompaniet).
Svea Steamboat Co. of Stockholm (Stockholms Rederiaktiebolaget
Svea).
Swedish American-Mexico Line (Aktiebolaget Svenska Amerika-
Mexiko-Linien).
The agreement with the North Star Steamship Co. was approved
by a law of 1906. This agreement calls for the maintenance of a
regular steamship line between Sweden and Argentina, Uruguay,
and Brazil with free carriage of mails. This contract was entered
into for a five-year period and called for a total grant of 510,000
kronor ($136,680), payable at the rate of 102,000 kronor ($27,336)
per year. By an order in council in 1908 an extra allowance of
145,000 kronor ($38,860) was granted for the period 1908 to 1910, and
in 1910 a law was passed providing for the payment of a total annual
subsidy of 110,000 kronor ($29,480) during the years from 1911
to 1915.
An order in council of December, 1907, authorized a subsidy not to
exceed 370,000 kronor ($99,160) per year for a period of five years
to the Swedish East Asiatic Co. (Svenska Ostasiatiska Kompaniet).
This company was to maintain jointly with the Danish East Asiatic
Co. a regular steamship service between Sweden and Denmark and
East Asia and was to carry mails free of charge. This bounty was
intended to reimburse the company for Suez Canal fees but, as the
Commissioner of Navigation points out in his annual report for
1909, page 56, these grants are more of a trade or navigation subsidy
than a mail subvention, " for there are much quicker ways of sending
Swedish mails to Asia."
It is interesting to know that the grant made to the Swedish East
Asiatic Co. was considerably reduced upon the expiration of its
original convention. A law of 1911, which extended for a period of
five years the agreement between the Swedish Government and the
Swedish East Asiatic Co., provided that in the years 1913 to 1915
the Government would reimburse the company to the extent of 60
per cent of the Suez Canal dues and fees actually paid; for 1916, 55
120
GOVERNMENT AID TO MERCHANT SHIPPING.
per cent; and for 1917, 50 per cent. In no case, however, was the
grant to exceed 300,000 kronor ($80,400) in the years 1913, 1914, and
1915, 275,000 kronor ($73,700) in 1916, and 250,000 kronor ($67,000)
in 1917.
The Svea Steamboat Co., of Stockholm (Stockholm Rederiaktiebo-
laget Svea) 'operates a regular line of steamships between Stockholm
and Riga under a subsidy granted by an order in council of October,
1908. This subsidy was to run for a period of five years at the rate of
60,000 kronor ($16,080) for the first two years, 55,000 kronor ($14,-
740) for the third year, and 50,000 kronor ($13,400) for the fourth
and fifth years. This grant may be regarded as a subsidy or bounty
although the company is bound to carry mails if the Swedish postal
authorities so require.
In 1912 a new line to the United States was established under an
agreement with the Swedish America Mexico Line (Aktiebolaget
Svenska Amerika-Mexiko-Linien) to operate a cargo and passenger
service between Goteborg and New York for a period of five years.
The subsidy granted is 100,000 kronor ($26,800) per year.
In 1913 a service between Sweden and Australia was established by
the Trans-Atlantic Steamship Co., under an agreement with the
Swedish Government that called for an annual subsidy of 100,000
kronor ($26,800).
Subventions. For many years prior to 1906 practically the only
direct governmental aid extended to Swedish_shipping was in the
form of payments for transportation of mail. These payments, how-
ever, were very largely, if not entirely, compensation for a definite
transportation service and were made to foreign as well as to Swedish
shipowners.
A few mail contracts in existence before 1906 might be considered
as granting a certain degree of subvention.¹ One of these was with
the Gothland Steamboat Co. and provided for a line of steamers
between the island of Gothland and the mainland of Sweden for a
period of 5 years, beginning with the autumn of 1896. This contract
called for a semiweekly passenger, freight, and mail service between
Wisby and Stockholm, between Wisby and Vestervik, and between
Wisby and Norrkoping. For every round trip engaged in the car-
riage of mails on the Wisby-Stockholm route a payment of 700
kronor ($187.60) was made, 500 kronor ($134) from the post office
fund and 200 kronor ($53.60) from the commercial and shipping
fund; while for each round trip on the other two routes a payment of
500 kronor ($134) was made by the Post Office Department.
Another contract, which may be regarded as granting a subven-
tion, is that entered into on September 12, 1896, between the General
Post Office and the Swedish and Continental Shipowners Co. This
contract came into operation on May 1, 1897, and was for a period
of 10 years. The contract called for the maintenance of a daily mail
service between Trelleborg, Sweden, and Sassnitz, Germany. The
Swedish Government was to pay the cost of one-half of the required
number of trips or 100,000 kronor ($26,800) annually, while the
German Government was to pay the balance. This contract was
modified by Royal Letters of December 3, 1899, and March 3, 1899,
which provided for a yearly subvention of 225,000 kronor ($60,300).
1 Great Britain, Foreign Office: Further Reports on Bounties on the Construction and
Running of Ships, etc., Commercial No. 2 (1898), p. 110.
SCANDINAVIAN COUNTRIES.
121
Since 1909 the traffic between Trelleborg and Sassnitz has been
moved largely in car ferries, which method makes it possible to run
trains through without change from Berlin to Stockholm, thus sav-
ing much time and making the use of steamships for this purpose
unnecessary. It is reported¹ that-
In accordance with an arrangement entered into between the respective
countries Swedish and German vessels run alternately on the route, which
has become more and more frequented on account of its convenience, as the
crossing occupies a short 4 hours, and the whole journey from Stockholm to
Berlin takes only 22 hours.
Another contract that may possibly be regarded as granting a
subvention is one that was entered into under an agreement between
Sweden and Russia on May 4 (16), 1895. This convention provided
for the carrying of mails between Sweden and Finland during the
winter months. The service was to be established and kept up by
the Finland Postal Department, but the expense was to be borne
equally by the postal departments of the two countries. The Swedish
share was placed at the maximum of 10,000 Finnish marks ($1,930)
with a proviso that if the number of postal trips in both directions
should be less than 26 in any winter the contribution of Sweden
should be made on the basis of not more than 400 marks ($77.20)
each round trip.
The principal subsidies or subventions provided in the budgets of
Sweden for the years 1907 to 1916 are indicated in the following
table:
1907...
1908.
1909..
1910...
1911.
1912..
1913...
1914..
1915..
1916...
Budget years.
Total.
Swedish
America-
Mexico
line.
East Asia).
North Star
S. S. Co.
(Sweden to
Argentina
and Brazil).
Swedish East Trans-Atlan-
Asiatic Co.
(Sweden to
tic S. S. Co.
(Sweden to
Australia).
•
$64, 320
$61, 320
150, 080
24, 120
155, 440
$125, 960
56, 280
129,980
99, 160
30, 820
128, 640
99, 160
29, 480
101, 840
99, 160
29, 480
150, 080
72, 360
$40, 200
26, 800
150, 080
56, 280
40, 200
26, 800
$26, 800
144, 720
56, 280
40, 200
26, 800
21,440
50, 920
56, 280
26, 800
50, 920
Steamship companies.-The following table shows the number
and gross tonnage of vessels comprising the fleets of the principal
Swedish steamship lines:1
Steamship companies.
Vessels.
Gross
tonnage.
Angfartygsaktiebolaget Tirfing, Goteborg.
20
Stockholms rederiaktiebolag Svea, Stockholm.
222
69, 114
74
64,880
Rederiaktiebolaget Lulea-Ofoten, Stockholm....
16
59, 175
Rederiaktiebolaget Nordstjernan (Johnson Line), Stockholm...
16
49,353
Rederiaktiebolaget Trans-Atlantic, Goteborg.
9
34.346
Aktiebolaget Svenska ostasiatiska kompaniet, Goteborg.
6
25, 379
Angfartygsaktiebolaget Thule, Goteborg.
11
16.345
Förnyade angfartygsaktiebolaget Svenska Lloyd, Goteborg.
12
13,977.
Rederiaktiebolaget Henckel, Malmo..
9
13,756
Trelleborgs angfartygs nva aktiebolag, Trälleborg.
11
13.064
Angfartygsaktiebolaget Svithiod, Goteborg..
8
9,812
Aktiebolaget Svenska Amerika-Mexiko-linien, Goteborg.
2
9,330
1 Sweden: Historical and Statistical Handbook, issued by Swedish Government, 1914,
Vol. II, p. 558.
Chapter V.-BELGIUM AND THE NETHERLANDS.
BELGIUM.
Although Belgium ranks sixth among the nations of the world
in respect to value of foreign trade, its merchant marine ranks only
sixteenth among the merchant navies of the world. Not only is the
foreign trade of Belgium extensive but the country itself is well
placed commercially and has an ample sea coast in addition to one
of the most active ports in the world.
Just why a country ranking so high in value of foreign trade
should occupy such an inferior position in merchant shipping is dif-
ficult to state. One reason may be that because of its proximity to
England, France, and Germany, Belgium has been amply served by
the shipping of those countries and has, therefore, not felt the
necessity for having a merchant marine of its own. What lends sup-
port to this theory is the fact that the industrial development of
Belgium has been due to a large extent to foreign capital, German,
French, and English, and that subsidies have for years been given
to several German lines.
According to a German authority on the subject of ship subsidies
another cause for so small a merchant marine in Belgium is the dis-
inclination of the Belgian people to seafaring life. This authority
also states that Belgium has subsidized German lines mainly for the
purpose of drawing the transit trade of Germany to Antwerp rather
than to have it go through the rival port of Rotterdam. It might
be well also to note that this policy has not only contributed largely
to the development of the port of Antwerp and to the revenues of
the Belgian railways but it has also provided Belgian importers
and exporters with regular communications with remote sections
to which an independent Belgian line could not be operated at a
profit.
The following table shows the actual and potential net tonnage of
the Belgian merchant marine at the beginning of each five-year
period from 1870 to 1910 and for the years 1911 and 1912:
1870....
1875....
1880.
1885...
1890...
1895...
1900..
1905.
1910...
1911..
1912...
Years, a
Actual net tonnage.b
Total.
Sail.
Steam.
Potential
net
tonnage.c
30,149
20,648
9,501
50,186
14,756
35.430
49.151
121,046
75.666
10,442
65,224
206, 114
84,862
5,053
79,809
244, 480
75,946
4,393
71,553
219,052
87,213
917
86,296
259,805
113, 259
741
112,518
338,295
99,733
2,844
96,889
293, 511
191, 132
3,402
187,730
566,592
166,420
5.905
160,515
487,450
181,637
7,616
174,021
529, 679
¹ Greve: Seeschiffahrts-Subventionen der Gegenwart, 1903, p. 21.
2 At end of year.
• Includes ships of 50 tons and over.
• Computed on theory that 1 ton of steam tonnage equals 3 tons of sail tonnage.
122
BELGIUM AND THE NETHERLANDS.
123
The State aid extended to shipping at Belgian ports, both under
the Belgian flag and under foreign flags, has been mainly of an
indirect character. The indirect aid has been of five kinds, namely,
(1) reservation of coasting trade, (2) exemption from import duties,
(3) exemption from pilotage fees, light dues, etc., (4) preferential
railway rates, and (5) loans to shipping companies. The direct aid
has consisted exclusively of subsidies to German steamship lines.
INDIRECT AID.
Reservation of coasting trade.-The coasting trade of Belgium,
which is not extensive, is reserved to ships flying the Belgian flag.
Exemption from import duties. Since the passage of the law of
April 12, 1864, all materials imported for the construction, alteration,
repair, or equipment of vessels, as well as foreign-built vessels
transferred to Belgian registry, have been admitted free of duty.
According to one authority, the free admission of materials neces-
sary for the construction and repair of vessels has been an important
factor in the development of large shipbuilding concerns in
Belgium.¹
Another factor that has contributed toward the development of
the Belgian shipbuilding industry is the law of August 18, 1907,
which granted large loans to three Belgian shipping companies, and
required that these companies should build, as far as possible in
Belgian yards, a total of 25 vessels ranging from 1,100 net tons to
3,056 net tons.
Exemption from pilotage fees, light dues, and port charges.—
Under agreements between the Belgian Government and the North
German Lloyd, the Kosmos Line, and the United Steamship Co.
of Copenhagen, the vessels of these companies have been exempted
from pilotage fees, entrance and clearance fees, and light dues at
all Belgian ports, on voyages made in conformity with these agree-
ments. The State agreed, moreover, to reimburse these companies
for similar dues paid to the Dutch Government, which controls the
mouth of the River Scheldt, the approach to Antwerp.
Preferential railway rates.-Preferential railway rates on export
commodities, appear to have been granted by the Belgian Govern-
ment, which owns practically all the railways in Belgium.
It is believed that the lower railroad rate on export traffic has
been given largely with a view to attracting the transit trade of
Germany to the port of Antwerp. Under date of October 9, 1897,
the British Minister at Brussels reported as follows: 2
Very great reductions are made in favor of all kinds of merchandise destined
for Belgian ports, and these no doubt have very much contributed to the enor-
mous increase which has taken place during the last few years in the shipping
trade of Antwerp. These rates are mostly calculated on a differential scale, the
cost of transport decreasing per kilometer in proportion with the distance
traversed.
A series of special fixed tariffs has also been arranged
with certain regular lines of steamers and also with other European countries,
for the direct transit of goods in order to encourage as much as possible their
exports as well as their imports through Belgian ports.
*
*
Under an agreement approved September 10, 1895, between the
Belgian State Railways and the Red Star Line, which was the most
1 Greve: Seeschiffahrts-Subventionen der Gegenwart, 1903, p. 21.
• British report on bounties, etc., Commercial No. 2 (1898), p. 9.
124
GOVERNMENT AID TO MERCHANT SHIPPING.
important line under the Belgian flag, special arrangements were
made for the facilitation of traffic destined for the ships of this
company. It is believed, however, that the Red Star Line secured
little, if any, preferential advantage under these arrangements.
Loans to shipping companies. The policy of granting loans to
shipping companies operating under the Belgian flag was instituted
by the law of August 18, 1907, which gave the Government authority
to subscribe, under certain conditions, a sum not exceeding 5,000,000
francs ($965,000) toward the capital stock of three Belgian shipping
companies, these loans to be secured by the issuance of 3 per cent
bonds, redeemable at par after 20 years. The companies to which
these loans were made are as follows:
The Ocean Co., which was founded in 1903 and operates five of its
own steamers, in addition to chartered vessels, on regular routes to
Mediterranean ports.
The Royal Belgian-Argentine Co., which was founded in 1906
and operates four of its own steamers, in addition to chartered ves-
sels, in regular service between Antwerp and Argentina.
The Belgian National Co. of Maritime Transportation, which was
founded in 1889 and operates nine steamers in regular service be-
tween Antwerp and the eastern Mediterranean.
The loan to the Ocean Co. amounted to 2,000,000 francs ($386,000)
and was granted on the condition that the company should have a
paid-up capitalization of 4,000,000 francs ($772,000) and that the
money advanced should be used exclusively for the increase of the
company's fleet. In addition the company agreed to build, mainly
in Belgian yards, 10 vessels varying in size from 1,100 to 1,300 net
tons.
The loan to the Royal Belgian-Argentine Co. amounted to 2,000,000
francs ($386,000), and was made on condition that the company
should have a paid-up capitalization of 5,000,000 francs ($965,000)
and should build, mainly in Belgian yards, six vessels, varying in
size from 1,825 net tons to 3,056 net tons.
The loan to the Belgian National Co. of Maritime Transportation
was 1,000,000 francs ($193,000). This company was required to
have a paid-up capitalization of 4,000,000 francs ($772,000) and to
build nine vessels from 1,500 to 3,000 net tons capacity, preferably
in Belgian shipyards.
Other indirect aid.-A small measure of indirect State aid was
extended to the Belgian-Congo Steamship Co. (Companie Belge
Maritime du Congo), whose vessels operated between Antwerp and
the Belgian Congo. Under an agreement between this company and
the Minister of the Colonies all Government supplies, etc., were to
be shipped by this line and the company's steamers were to be used
for the conveyance of all officials sent to the colony.
DIRECT AID.
Bounties or subsidies.-The only subsidies granted by the Belgian
Government were to the North German Lloyd and the German-
Australian steamship companies. The agreement with the North
German Lloyd was entered into in 1886, and provided for an annual
subsidy of 80,000 francs ($15,440) as well for the reimbursement
BELGIUM AND THE NETHERLANDS.
125.
of all pilotage fees, light dues, etc., paid to Belgian and Dutch
authorities. Under this convention the North German Lloyd agreed
to have its vessels operating between Bremen and the Far East and
Australia call at Antwerp on outbound and homeward voyages.
The exemption from pilotage fees, light dues, etc., has been of
greater assistance than the subsidy itself, as is indicated by the fact
that in 1912 the reimbursement to the company on account of pilot-
age charges, etc., amounted to 145,350 francs ($28,052.55), while the
subsidy itself amounted only to 80,000 francs ($15,440).
The agreement with the German-Australian Steamship Co. was
entered into in 1889, and provided that the vessels of this company
on outbound voyages from Hamburg to Australia should call at
Antwerp once every four weeks, and on their homeward voyages
should call at Antwerp not less than 6 and not more than 13 times
per year. The company agreed also to carry at least 1,500 tons of
cargo from Antwerp on the outward voyages. Under this agreement
the company received 1,500 francs ($289.50) for each outbound and
each return voyage between Antwerp and Australia. Apparently this
company was not granted an exemption from pilotage fees, light
dues, etc.
As indicated above, the exemption from pilotage fees, light dues,
etc., both Belgian and Dutch, amounted to a considerable advantage.
It is interesting to note that this exemption was made to the Kosmos
Line, also under the German flag, as early as 1874, and to the United
Steamship Co. of Copenhagen, a Danish corporation, at a later date.
The original agreement with the Kosmos Line provided that the
vessels of this company should call at least once a month at Antwerp
on the outward voyage to the west coast of South America. Later
this service was increased to two calls a month.
The following table shows the amount paid by the Belgian Gov-
ernment in the years 1901 to 1912 to German lines in the way of
subsidies and reimbursement of pilotage charges, etc.:
Subsidies.
Refund of pilotage
charges, etc.
1901...
1902.
1903..
1904..
1905.
1906...
1907...
1908..
1909..
1910.
1911...
1912...
Year.
North
German
Lloyd.
German-
Australian
Steamship
Co.
North
German
Lloyd.
Kosmos
Line.
$15, 440
15, 440
$7,045
$26, 673
5,423
$5,568
28, 130
15,440
5,332
5,964
27,242
15, 440
6,350
6, 330
28,072
15, 440
6, 798
5,674
28, 689
15, 440
6,827
7,488
32, 366
15, 440
7,498
7,527
33,360
15,440
6,905
7,488
36, 549
15, 440
8, 024
7,527
37,027
15, 440
8,053
7,488
36, 303
15, 440
8, 159
7,353
27,536
15,440
8,767
7,450
28,053
6,326
Postal subventions.-No postal subventions are granted by the
Belgian Government, but steamers owned by the Belgian Govern-
ment are operated in mail service in connection with the Belgian
State Railways between Ostend and Dover.
126
GOVERNMENT AID TO MERCHANT SHIPPING.
THE NETHERLANDS.
The merchant marine of the Netherlands ranks eighth among the
merchant navies of the world. Prior to 1870 its rank was higher
and the proportion of the world's commerce carried under the
Dutch flag was much larger. Between 1860 and 1890 there was
an almost constant decrease in the net tonnage of Dutch shipping.
Since 1890, however, there has been a rapid increase, the increase
being particularly marked since 1900.
The following table shows the net tonnage of sail and steam ships
under the Dutch flag at the beginning of each five-year period be-
tween 1870 and 1910, and for each year from 1911 to 1913.¹ These
figures do not include the merchant shipping of the Dutch East
Indies nor the tonnage of the Royal Steam Packet Co. (Koninklijke
Pakketvaartmaatschappij) and of the Java-China-Japan Line
(Naamlooze Vennootschap Java-China-Japan Lijn), both of which
lines operate exclusively in the Far East.
1870....
1875...
1880.
1885...
1890...
1895...
1900...
· 1905...
1910...
1911.
1912.
1913..
Years.a
a On Dec. 31.
Actual net tonnage.b
Total.
Sail.
Steam.
Potential
net
tonnage.c
389, 614
370, 159
19,455
428, 524
410,689
350, 764
59, 925
530,539
328, 281
263,887
64, 394
457,069
302,827
194, 346
108, 481
519,789
255, 711
127,200
128, 511
512,733
290, 812
102, 473
188, 339
667, 490
346,923
78, 493
268, 430
883,783
411,330
54,546
356, 784
1, 124, 898
534, 275
45, 936
488, 339
1,510, 953
565, 613
42,312
523, 301
1,612, 215
617, 321
40, 718
576, 603
1,770, 527
687, 635
40, 199
647, 436
1,982, 507
b Including ships of 40 net tons and over.
c Computed on theory that 1 ton of steam tonnage equals 3 tons of sail tonnage.
Two important factors account for the marked decline of the
Dutch merchant marine in the period between 1860 and 1890, namely,
the substitution of steamships for sailing vessels in the world's
carrying trade at this period and the breaking up of the monopoly
of the Netherlands in the colonial trade of the Dutch East Indies.
A glance at the table shown above indicates clearly that while
the sail tonnage of the Dutch merchant marine declined rapidly
in the period from 1870 to 1890 the steam tonnage increased slowly.
The failure to make a larger use of steam tonnage was probably due
in part to the lack of an efficient iron and steel industry, and probably
also in part to conservatism, which is indicated in the following
statement:
Up to the seventies and even into the eighties (of the nineteenth century)
Holland held the remainder of its former fleet of East Indian traders, proud,
luxuriously equipped sailing vessels, whose captains strutted around like
admirals or nabobs, but the old-established splendor could no longer maintain
itself in the hurried, niggardly, but rational commercialism of the present.
1 Jaarcijfers voor het Koninkrijk der Nederlanden.
2 Fitger. Die wirtschaftliche und technische Entwicklung der Seeschiffahrt, etc. 1902,
p. 22.
BELGIUM AND THE NETHERLANDS.
127
The tumble in freight rates that took place in the seventies and eighties brought
to the uneconomical shipping of Holland such severe losses that they gave up
in great indignation.
About 1888 it became clear to the Dutch people that they must
provide regular mail and commercial communications with and in
their East Indian possessions. It was at this time also that a mail
line between Flushing and Queensborough was instituted with guar-
anties of fixed annual payments for the carriage of mails.
The increase in the merchant marine of Holland since 1888 may be
attributed in a large degree to government aid, but it should be
noted that although Dutch shipping has increased fairly rapidly
since 1888, the proportion of the ocean trade of the Netherlands that
is carried under the Dutch flag decreased from about 30 per cent
in 1890 to 25 per cent in 1900, at which figure it has since remained
with but slight variations.
The experience of the Netherlands in building up its merchant
marine is not often cited in discussions of governmental aid to ship-
ping. It is, however, illuminating, even though the situation of the
country is unique in several respects. The Netherlands has long
been and still is a great colonial nation, possessing rich colonies
that are far larger and far more populous than the mother country
itself and are situated far distant.
The granting of subventions for the maintenance of regular mail
services between the mother country and the colonies has, therefore,
a distinct political aspect. At the same time the proximity of the
Netherlands to Great Britain and Germany, both of which have
large merchant navies and an extensive overseas trade, subjects the
Dutch merchant marine to severe competition.
INDIRECT AID.
Reservation of coasting trade.-Until comparatively recent years,
vessels under the Dutch flag enjoyed special advantages in the trade
between the Netherlands and the Dutch East Indies. Lower tariff
duties were imposed on imports brought in Dutch vessels. After
1865, however, this differential was reduced and in 1872 entirely
abolished.¹
Exemption from import duties.-Foreign-built seagoing ships as
well as foreign materials for use in the construction of seagoing
ships may be imported free of duty. Ships for inland navigation
are subject to a duty of 1 per cent ad valorem.
DIRECT AID.
SUBVENTIONS.
The direct aid extended to shipping by the Dutch Government
is limited largely to postal and colonial subventions for the main-
tenance of regular communications between the mother country
and her extensive colonies in the Far East and in the West Indies.
Although some or all of these grants may provide sums in excess
of the cost of transporting mail, they can not be said to be a subsidy
even to the extent of such excess. The return for these subventions
1 Clive Day: The Dutch Colonial Fiscal System, Amer. Econ. Rev., 3d series, Vol. I,
pt. 3, p. 80.
128
GOVERNMENT AID TO MERCHANT SHIPPING.
is not merely the free carriage of mails but also the maintenance
of regular communications between the mother country and her
colonies.
Zeeland Steam Packet Co.-The first mail subvention was that to
the Zeeland Steam Packet Co. (Stoomvaarmaatschappij Zeeland).
A contract between the Dutch Government and this company was
entered into on June 11, 1888, and was approved by a law of De-
cember 9, 1888. This contract covered a period of 10 years, com-
mencing with October 1, 1888, and provided for the transportation
of mails, including parcels, between Flushing and Queensborough.
The boats of the company were to make two round trips daily, for
which service they were to receive annually 40,000 florins ($16,080).
In addition the company was guaranteed 260,000 florins ($104,520)
yearly for the carriage of foreign mails, the compensation for the
service being computed on the International Postal Union basis
of 2 francs (38.6 cents) per kilo of letters and 25 centimes (4.8 cents)
per kilo of other packets except parcel post. Any amount received
in excess of 260,000 florins ($104,520) for the carriage of foreign
mails was to be shared by the company with the State.
The contract with the Zeeland Steam Packet Co. was renewed in
1898 (see Official Gazette No. 93, of that year) and continued, with
slight modifications, the former arrangement. The contract was
renewed again in 1908.
The following table shows the amount received by this company
for the carriage of mails in the years 1888, 1890, 1895, 1900, 1905,
and for each year from 1910 to 1913. The table also shows the
number and gross tonnage of ships operated by this company, the
number of round trips, the number of persons and the amount of
freight carried, and the net profits in each of these years.¹
Years.
Steam-
ships in
service.
Gross Round
tonnage. trips.
Persons
carried.
Freight
carried.
Receipts
for mail
transporta
tion.
Net
profit.
Tons.
1888....
7
730
70,388
38, 395
1890....
$75,808
7
730
76, 333
44,698
1895...
110,358
10
a
730
73, 164
1900...
70, 071
8
123, 303
(a)
730
95, 227
1905...
55, 626
α
99, 366
7
12.379
730
102, 166
52, 602
1910...
$127, 007
183, 265
8
17,800
730
148, 842
1911.....
57,277
223,552
425, 474
7
16, 155
"31
154, 801
1912....
61, 183
7
223, 746
338, 001
16, 155
132
158, 811
62,847
224, 419
1913...
7
16, 155
376, 229
730
169, 705
70,901
225, 846
407, 815
a Not reported.
The above table shows comparatively little development in the
steamship tonnage employed in the service of this company despite a
large increase in the number of persons and the amount of freight
carried. It will be observed, moreover, that the net profits have also
increased in marked degree.
Netherland Steam Packet Co. and Rotterdam Lloyd.-The next
important subvention dates from the agreement made on November
12, 1892. with the Netherland Steam Packet Co. (Stoomvaartmaat-
schappij Nederland) and the Rotterdam Lloyd (Rotterdamsche
1 Jaarcijfers voor het Koninkrijk der Nederlanden, 1896, pp. 199–200; 1904, pp. 248–249;
and 1913, p. 297.
BELGIUM AND THE NETHERLANDS.
129
:
Lloyd). This agreement provided for the operation by the two com-
panies of a joint service to the Dutch East Indies for a period of 15
years, commencing May 1, 1893. They were to maintain jointly a
14-day mail service between Amsterdam and Rotterdam on the one
hand, and Batavia on the other, and were to be paid for the carriage
of mails in accordance with the international scale fixed by the Postal
Convention at Vienna on July 4, 1891, with the guaranty by the
Dutch Government of a payment of at least 2,400 florins ($964.80)
for each outward and homeward voyage. The Netherland Steam
Packet Co. was to operate from Rotterdam via Genoa and the Rotter-
dam Lloyd from Rotterdam via Marseille.
The contract provided that the running time between Amsterdam
and Genoa should be not more than 12 days, while from Genoa to
Batavia it should be 29 days during 6 months of the year and 30
days during the balance of the year. Within 5 years the running
time between Amsterdam and Genoa was to be reduced 1 day and
that between Genoa and Batavia 2 days, whereupon the guaranteed
sum of 2,400 florins ($964.80) per voyage was to be raised to 4,000
florins ($1,608). The increased rate commenced in April, 1895.
The Rotterdam Lloyd was to maintain practically the same run-
ning time between Rotterdam and Marseille and between Marseille
and Batavia, as that stipulated in the contract of the Netherland
company for voyages between Amsterdam and Genoa and Genoa
and Batavia.
One-half of the payments made to these 2 lines was met by the
Netherlands Government and the other half by the Netherland-
Indian Postal Administration. The contract did not call for the
conveyance of parcel post packages and separate contracts were
entered into with the companies for this purpose as well as for the
transportation of Government officials and troops and for the con-
veyance of supplies and Government products (coffee, tin, and kina
bark) between the Indies and the Netherlands. The following table
shows the total amounts paid under the mail and parcel post con-
tracts in the years 1894 to 1898:1
1894...
1895....
1896....
1897...
1898....
Years.
Netherland
Steam Packet Co.
Rotterdam Lloyd
Steamship Co.
Total.
Mail.
Parcel post.
Mail.
Parcel post,
$156, 402
197, 411
$50, 169
65, 068
$29, 426
35, 376
$49, 632
65, 289
241, 602
82,008
39,557
82,008
253, 300
259,971
$27, 175
31,678
38, 029
82,008
39,597
85,224
46, 471
80,358
42, 451
83, 616
53,546
The manner in which the Netherland Steam Packet Co. and the
Rotterdam Lloyd have developed is indicated clearly in the following
tables, which show the number and net tonnage of the steamships
used by each company, the number of voyages to the Dutch East
Indies, and the net profits from operation in the years 1890, 1895,
1900, 1905, and each year from 1910 to 1913.2
1 Annual Report of the Commissioner of Navigation, 1899, p. 168.
2 Jaarcijfers voor het Koninkrijk der Nederlanden, 1895, pp. 199–200; 1904, pp. 248-249;
and 1913, pp. 296–298.
41987-16- -9
130
GOVERNMENT AID TO MERCHANT SHIPPING.
Netherland Steam Packet Co.
Rotterdam Lloyd.
Years.
Steam-
ships in
service.
Net ton-
nage.
Number
of
voyages
Net op-
erating
revenue.
Steam-
ships in
service.
Net ton-
nage.
Number
of
Net op-
erating
voyages
revenue.
made.
1890...
13
34
$534, 907
1895...
1900....
1905...
1910...
1911.
1912.:
26
427252
15
36
442, 147
19
47
493, 266
17
44,992
44
702, 046
75,355
66
997, 037
92,694
62
1, 165, 043
93, 879
68
1,678, 430
1913...
31
114,989
65
1,839, 879
31
2427282♫
13
32,700
23
$278, 588
15
40, 600
31
361,905
13
48,000
34
302, 127
17
77,550
39
541, 355
20
95, 928
52
922, 662
23
113,966
52
1,050, 818
145, 127
58
1,662, 768
166, 548
67
1,918, 389
a Not reported.
Upon the expiration in 1908 of the original contract with the
Netherland Steam Packet Co. and the Rotterdam Lloyd a new con-
tract was made for a period of 15 years. The new contract is similar
in many ways to the old, but the amounts granted are slightly less
than the former rates.
Royal West Indian Mail Service.-A subvention for mail service.
between Amsterdam and Dutch Guiana was instituted under an
agreement entered into August 26, 1895, between the Dutch Govern-
ment and the Royal West Indian Mail Service (Koninklijke West-
Indische Maildienst), which was established in 1882 and began oper-
ations in March, 1883. This contract was for a period of five years.
commencing April 1, 1896, and provided for a voyage every three
weeks, with the following stipulations as to running time: Åmster-
dam to Paramaribo, 19 days; Paramaribo to Curacao, 15 days;
Paramaribo to Havre, 19 days; Havre to Amsterdam, 4 days.
The company was to receive for the carriage of both letter and
parcel-post mail for each outbound and homeward voyage 1,400
florins ($562.80). It was provided, however, that if the space occu-
pied by the parcel-post packages should be more than 2 cubic meters
(about 70 cubic feet) payment should be made at the rate of 40
florins ($16.08) per cubic meter of additional space so occupied. A
limit of 47,600 florins ($19,135.20) was placed on the amount that
could be earned in any one year. Details as to number of ships and
voyages, operating income, and net profit of the Royal West Indian
Mail Service in the years 1905 to 1914 are given in the following
table :1
1905..
1906...
1907....
1908..
1909.
1910...
1911...
1912..
1913...
1914...
Number of voyages.
Gross
Years.
Number
of ships.
On prin- On aux-
operating Net profit.
income.
cipal
lines.
iliary
lines.
9
26
9
26
8
26
12
26
11
26
11
12
26
10
26
10
26
10
26
22222 72222
5
8
$103, 253
207, 809
$41, 501
7
141,798
90,828
90,479
40
109, 497
102, 674
52
211,756
251
52
270, 882
42
288, 660
50,959
89,544
118,063
26
324, 292
130, 053
25
208, 329
27
232, 138
1 Jaarcijfers voor het Koninkrijk der Nederlanden, 1913, Pt. II (Colonies), p. 153.
98,229
86,793
BELGIUM AND THE NETHERLANDS.
131
The amounts paid in the years 1906 to 1910 by the Dutch Govern-
ment to each of the principal subventioned lines is indicated in the
following table:¹
Subventions.a
Companies.
1906
1907
1908
1909
1910
Netherland Steam Packet Co.
Rotterdam Lloyd.
$89, 148 $116,504
Royal West Indian Mail Service...
Zeeland Steamship Co..
84,999
86,673
$250, 607 $268, 817
{279, 310
26, 628
27,545
27,376
27,376
27,376
121,049
121, 179
125, 038
222,386
214, 282
Total...
322,668
352,856
403, 904
520, 711
523, 100
a Converted from pounds sterling to dollars at rate of $4.824 to the pound.
6 Flushing-Queensborough route.
Royal Steam Packet Co.-One of the most strongly supported lines
is that of the Royal Steam Packet Co. (Koninklijke Pakketvaart-
maatschappij), which operates numerous coasting services in the
Dutch East Indies. A contract between this company and the Dutch
East Indian Government was entered into in 1891. This agreement
called for the maintenance of 13 routes, the subvention for which
ranged from 1.5 florins ($0.60) to 10 florins ($4.02) per nautical mile
of voyage.
This company has been very successful in its operations and has
greatly increased the size of its fleet and the distances run on the non-
contract routes, as well as its net earnings. The following table
shows, for the years 1890, 1895, 1900, and each year from 1905 to 1913,
the number of boats operated, the number of miles run on contract
and on noncontract routes, the amounts of Government subvention,
and the net profits from operation: 2
Miles run.
Years.
Number
of ships.
Total.
Under
contract.
Profit
from op-
erations.
Govern-
ment sub-
vention.
All other.
1890..
25
134, 471
83, 154
1895.
51,317
32
241,847
94, 658
1900..
147, 189
(a)
$541, 659
(a)
36
$265, 255
290, 964
76, 405
214, 559
1905..
698, 868
162, 909
45
371, 458
1906.
87,877
283, 581
759, 415
48
188, 426
367, 320
85,502
281,818
1907...
748, 292
184, 646
52
403, 665
82,251
1908...
321, 414
60
432, 717
742, 863
182, 502
77,031
1909..
355, 686
814, 459
66
182, 403
481, 726
78, 3.50
1910.
403, 376
816, 199
68
511, 155
82, 205
230, 119
1911...
428,950
1,305, 107
240.973
73
533, 351
81, 744
451, 607
1912...
1,272, 576
80
248, 272
566, 136
81, 401
484, 735
1913
1,404, 042
79
272, 666
593, 638
101, 571
402,067
1,496, 373
306, 505
• Not separately reported.
The above table shows an important development in the operations
of this company. Although the distance operated on contract routes
increased comparatively little during this period, the distance on
noncontract routes increased almost ninefold, so that in 1913 only
a little more than one-sixth of the total mileage covered by the boats
1 Great Britain, Foreign Office: Report on Bounties and Subsidies in Respect of Shipbuild-
Ing, Shipping, and Navigation in Foreign Countries, 1913, p. 33.
2 Jaarcijfers voor het Koninkrijk der Nederlanden, 1898, 1902, and 1913, Pt. II (Colo-
nies), pp. 93, 97, and 105, respectively.
132
GOVERNMENT AID TO MERCHANT SHIPPING.
of this company was on contract routes. The above data also show
that the dependence of the company on Government aid is being rap-
idly reduced. The receipts from the Government were equal to about
one-half of the profit from operations in 1895, as compared with only
about one-fifth in 1913.
By a law of September, 1911, the Governor General of the Dutch
East Indies was authorized to conclude with the Royal Steam Packet
Co. an agreement granting up to the year 1920 an annual subvention
not exceeding 150,000 florins ($60,300) for the maintenance of direct
service between Java and Australia. Under this agreement the com-
pany was to make 12 voyages a year and to call on both outward and
return trips at Batavia, Samarang, Sourabaya, Thursday Island,
Brisbane, Sydney, and Melbourne.
SPECIAL GRANTS.
Java-China-Japan Line. In a law of July 7, 1902, the Dutch
Government provided for a regular mail service between Java and
China and Japan, to be operated by the Java-China-Japan Line
(Naamlooze Vennootschap Java-China-Japan Lijn) for a period of
15 years. The amounts granted were to be 300,000 florins ($120,600)
annually for the first five years, 250,000 florins ($100,500) for the
next five years, and 200,000 florins ($80,400) for the final five-year
period, or $1,507,500 in all.
These grants differ from those given under the mail contracts re-
ferred to above in that they are regarded as advances to be repaid
from the profits of the company. Article I, section 5 of the law of
July 7, 1902, provided that the stockholders should first receive out of
the net earnings a dividend equal to 5 per cent on the paid-up capital
stock. From net earnings of more than 5 but less than 9 per cent the
State should receive two-fifths, and from net earnings in excess of 9
per cent the State should receive three-fourths. If in any year the
profits paid to stockholders should amount to less than 5 per cent, the
deficiency should be made up out of extra profits in the following
years before the State could participate. In case of liquidation the
unpaid balance of the advance should be paid to the State out of the
asests of the company after the settlement of all debts and the repay-
ment at par of all capital stock.
The subsidies or advances were to be made in equal shares by the
Netherlands and the Government of the Dutch East Indies.
The service required under this law is a voyage every four weeks
between the ports of Sourabaya, Samarang, Batavia, Hongkong,
Shanghai, Yokohama, Kobe, and Amoy, with calls on both the out-
ward and the homeward voyages at the first four ports.
The following additional conditions were imposed:
(a) All mail, including parcel-post packages, to be carried free.
(b) Speed.-Not specified.
(c) Admiralty requirements.-The Governor General of the Dutch East Indies
to have the right to hire one or more ships at a price not to exceed 0.75 florins
(30.2 cents) per net register ton per day on the first 600 tons and 0.50 florins
(20.1 cents) per net ton per day on the remaining tons. Governor General to
have the right to purchase at any time one or more of the ships of the company.
(d) Control by Government.-Appointments of directors and representatives
and adoption of statutes and by-laws to be subject to the approval of the Dutch
Government, which was also to have the right to be represented at all meetings
of the company and the power to examine all its books and papers.
BELGIUM AND THE NETHERLANDS.
133
(e) Nationality of officers and crew. The commanders, mates, and engineers
must be Netherlanders, or belong to the native population of the Dutch East
Indies, excepting, in special cases, at the discretion of the Governor General.
No requirements as to nationality of crew.
Royal Dutch Lloyd.-A mail service to be maintained by the
Royal Dutch Lloyd (Koninklijke-Hollandsche Lloyd) between Hol-
land and Argentina and Brazil was provided for in a law of Novem-
ber, 1907. This law is very similar in its terms to the law of 1902
which provides assistance for the Java-China-Japan Line. In other
words, advances, not bounties or subventions, are given to aid in
the establishment of the line. These payments amount to 300,000
florins ($120,600) per year for the first five years, 200,000 florins
($80,400) annually for the second five years, and 100,000 florins
($40,200) for the third five-year period.
Between 1905 and 1913 the number of ships operated by the Royal
Dutch Lloyd increased from 6 to 13; the net tonnage, from 16,035 to
49,129; and the number of round voyages, from 17 to 49 per year.
The facts as to number and net tonnage of ships and number of round
voyages are indicated also for the years 1910, 1911, and 1912 in the
following table:¹
1905...
1910...
1911.
Years.
Ships.
Net ton- Round
nage.
voyages.
6
16,035
9
33, 111
9
33, 111
34
35
17 1912....
1913...
Years.
Ships.
Net ton-
nage.
Round
voyages.
233
12
13
39,817
49, 129
3995
35
49
Royal Dutch Steamship Co.-Another successful steamship com-
pany operating under the Dutch flag is the Royal Dutch Steamship
Co. (Koninklijke Nederlandsche Stoombootmaatschappij). This
company, which, it is believed, was developed without any mail sub-
vention or other State aid, operates between ports in Europe. The
development of this line is clearly indicated in the following table,
which shows the number and tonnage of steamships employed, num-
ber of round voyages, amount of freight carried, gross receipts, and
net profits from voyages in the years 1890, 1895, 1900, 1905, and each
year from 1910 to 1913:2
1890...
1895...
1900...
1905...
1910...
1911...
1912...
1913...
Year.
Number
of steam-
ships in
service.
Ton-
nage.
Number
of round
voyages.
Freight
carried.
Receipts.
Net profit
from
voyages.
25
23,900
262
Tons.
303, 250
$1,049, 679
25
26, 300
$353, 491
251
306, 800
974, 044
28
30, 850
322, 726
279
372, 427
1, 184, 070
30
18, 063
387,546
331
450, 766
1,251, 491
36
33, 880
342, 062
348
833,500
1,999, 126
39
38, 139
592, 079
361
921, 395
2, 337, 984
46
52, 617
665, 289
420
1, 176, 566
3, 169, 373
45
48, 793
460
1,406, 821
3,781, 779
1, 132, 351
1,378, 925
Jaarcijfers voor het Koninkrijk der Nederlanden (Rijk in Europa), 1913, p 298
2 Jaarcijfers voor het Koninkrijk der Nederlanden, 1896, pp. 199-200; 1904, pp. 248-249; 1913, pp. 296-298.
* Gross, 1890, 1895, and 1900; net, 1905, 1910, and 1911 to 1913.
134
GOVERNMENT AID TO MERCHANT SHIPPING
Holland-America Line.-It is interesting to note that despite the
lack of Government aid the Holland-America Line has developed
very rapidly in the period from 1890 to 1913. The Holland-
America Line to-day ranks second in the Dutch merchant marine.
The rapid development of this line is indicated by data given in the
following table, which shows the number and net tonnage of steam-
ships, the number of voyages made, the net profit from voyages in the
years 1890, 1895, 1900, and 1905, and each year from 1910 to 1913:1
1890...
1895.
1900...
1905...
1910...
1911.
1912.
1913.
Year.
Number
of steam-
ships in
service.
Net
tonnage. voyages
Number Net
of
made.
profit
from
voyages.
11
10
68
$114, 361
70
352, 028
6
78
1,007, 620
9
92,904
58
1,467, 955
13
125, 809
153
1,940, 113
13
125, 809
172
1,626, 912
15
137, 247
122
2,432, 936
18
160, 970
141
2,692, 809
1 Jaarcijfers voor het Koninkrijk der Nederlanden, 1896, pp. 199–200; 1904, pp. 248-249; 1913, pp. 296-298.
• Not reported.
Chapter VI.-FRANCE, ITALY, SPAIN, AND PORTUGAL.
FRANCE.
France has made a far wider use of bounties and subventions for
the upbuilding of her merchant marine than has any other country.
Not only direct, but also indirect, State aid in many forms has
been extended to French shipping. If Government aid could of
itself create a large merchant marine, France should to-day have one
of the largest.
The fact of the matter is, however, that the French merchant
marine has not held its own in the international competition. In
1860 French shipping was outranked only by that of Great Britain
and the United States, and the French merchant marine was more
than one-fifth as large as that of Great Britain. By 1880 the French
marine had been passed by the Norwegian, German, and Italian
merchant navies. In 1910 the merchant navies of Great Britain, the
United States, Germany, Norway, and Japan outranked that of
France.
The following table shows the actual and potential net tonnage of
sailing and steam vessels of 2 net tons and upward in the French
merchant marine at the beginning of each five-year period from 1870
to 1910, and for each year from 1911 to 1913:
1870...
1875.
1880..
1885..
1890..
1895...
1900...
1905...
1910...
1911...
1912...
1913...
Years.a
Actual net tonnage.
Total.
Sail.
Steam.
Potential
net
tonnage.b
1,072, 048
1,028,228
917, 633
154, 415
(&)
1,380, 878
(c)
919,298
641, 539
277, 759
1,474, 816
1,000, 215
507, 819
492, 396
944, 013
1,985, 007
444, 092
499, 921
1,943, 855
887,078
385, 510
500, 568
1,887, 214
1,037, 726
510, 175
527,551
2,092, 828
1,389, 220
676, 193
711,027
2,809, 274
1, 451, 648
636, 081
815, 567
1,462, 639
3,082, 787
624, 521
838, 118
3, 138, 875
1,518, 518
614,024
904, 494
3,327, 506
1,582, 416
601, 983
980, 433
3,543, 282
a On Dec. 31.
Computed on theory that 1 ton of steam tonnage equals 3 tons of sail tonnage.
c Not reported.
The geographic situation of France-the nearness of its shores to
transoceanic countries-was of great advantage to French ship-
owners in the days of sailing ships, but is of no advantage now,
since it does not cost much more to carry a ton of merchandise by
steamer from Japan to Antwerp or Hamburg than to Havre or Mar-
seille. Steamers coming from America incur only a slight increase
in costs if they proceed directly to Hamburg instead of stopping at
135
136
GOVERNMENT AID TO MERCHANT SHIPPING.
Havre. And the freights by sea being much lower than those by rail,
the manufacturers prefer to have their incoming cargoes unloaded,
or outgoing cargoes loaded, at the port nearest to them.
The French coast, about 1,550 miles in extent, has a large number
of ports, many of them at considerable distances from industrial
centers. A large number of ports was an advantage in the days
of sailing vessels, when the cargoes were small and loading and un-
loading slow. At present a large steamer loads in a few hours a
cargo which formerly would have been distributed among several
vessels. Modern commerce tends, therefore, toward centralization in
a few large ports, such as London, Liverpool, New York, Antwerp,
and Hamburg, where accommodations are extensive and the cost of
maintenance correspondingly low. In France the cost of maintain-
ing the small ports absorbs the profits made by the large ports, and
this results in higher charges. In some ports a French ship will not
find a sufficient cargo, this resulting in an advantage to a foreign
ship coming in partly loaded and seeking only a partial cargo. Re-
pairs and provisions can be had at a small port only at higher prices
and with loss of time, which may be a serious factor for a large
steamer.
In order to have a prosperous merchant marine, a country must
possess a flourishing shipbuilding industry, and be able to furnish
cargoes both ways.
France does not possess the raw materials necessary for ship-
building; moreover, her shipbuilders, having but few ships to build,
must necessarily operate at higher costs and reduced speed. Large
production decreases the costs; in France the cost of shipbuilding is
much higher than in England.
The receipts from freights are dependent on the weight and vol-
ume of merchandise. The merchant marine depends on heavy and
cumbersome goods, whereas France exports chiefly light and costly
goods. In 1896 the average value of a ton of goods exported by sea
was $145 in France, $52 at Antwerp, $35 at Hamburg, $64 at Lon-
don, $41 at Glasgow. In that year France exported 3,549,836 tons,
England 52,500,000 tons, or fifteen times as much, and Germany
21,000,000 tons, or six times as much. The port of Antwerp alone ex-
ported 1,800,000 tons, or more than one-half of the total French
exports.
Lack of outgoing cargoes obliges French ships to charge higher
rates, as the outgoing trip brings them hardly any profit. Foreign
ships divide their earnings between the two trips. The lack of
French commercial establishments abroad is another reason why
French ships can not find sufficient cargoes, as the foreign houses
give preference to ships of their own flag.
INDIRECT AID.
Reservation of coasting trade.-Since the Acte de navigation of
September 21, 1793, coastwise trade between ports in continental
France has, with few exceptions, been reserved for ships under the
French flag.
For a long time the only exception was in favor of Spanish ships
by virtue of the treaty of August 15, 1761, which was renewed by
the treaty of Paris in 1814 and abolished by the treaty of December
FRANCE, ITALY, SPAIN, AND PORTUGAL.
137
8, 1877. Italian ships were permitted under the treaties of June 13,
1861, and November 3, 1881, to participate in the trade along the
Mediterranean coast of France and in the Algerian coasting trade.
This exception ceased to exist July 16, 1886, when the commercial
treaties between France and Italy expired.
Another privilege accorded to French shipping is the limitation
to ships of French registry of the entire trade between France and
Algeria. This restriction is contained in the laws of April 2, 1889,
and its purpose was not only to secure an increase of freight for the
French merchant marine, but also to bring Algeria into closer rela-
tions with continental France. This statute was modified by article
1 of the law of July 22, 1909, which provides that this restriction may
be suspended provisionally by decree in emergencies.
Exemption from import duties. Prior to the subsidy law of
January 29, 1881, shipbuilding materials were admitted free of duty.
One of the principal objects of that law and succeeding laws has
been the development of an extensive shipbuilding industry in
France. It is not surprising, therefore, that the French Govern-
ment has since that time imposed import duties upon foreign-built
ships and shipbuilding materials.
So far as ocean going vessels are concerned, the present rates of
duty are low, but they are very high on all pleasure yachts and motor
boats and on river boats of iron or steel construction. The general
and minimum rates of duty (the latter applying in the case of
ships imported from countries enjoying special tariff treatment)
provided in the present customs tariff of France are shown in the
following table:
Class of ship.
Commercial:
Seagoing ships, of wood, iron, or steel, sailing or steam, rigged and fitted..
Hulls of seagoing ships, of wood, iron, or steel..
River boats, of any size-
Of wood.
Of iron or steel.
To be broken up:
Of wood..
Sheathed in metal…….
Pleasure yachts and boats for river use:
Of wood..
Of iron or steel..
Motor boats with electric or explosion motor:
Of wood....
Of iron or steel...
Rates of duty per
gross ton.
General Minimum
tariff.
tariff.
$0.97
$0.39
.97
.39
2.32
1.93
9.65
7.72
.057
.057
.14
.14
5.79
3.86
14.48
9.65
7.33
4.82
14.48
9.65
Preferential railway_rates.—Regarding the granting of preferen-
tial railway rates to French navigation companies, the following
extracts from volume 3 of the Shipping Combinations report of the
Committee on the Merchant Marine and Fisheries is of interest:
REPORT OF CONSUL GENERAL AT MARSEILLE, FRANCE.
The French railways have adopted through rates, slightly favoring the French
navigation companies; but these rates have been fixed in the manner prescribed
by law, and are not based upon secret agreements between the carriers. The
1 P. 37.
138
GOVERNMENT AID TO MERCHANT SHIPPING.
tariff under which the rates in question are granted is officially designated
"Tarif 400-bis."
It may be noted in this connection that the railway rates in France require
Government approval. Any change in rates has to receive the sanction of the
minister of public works and be advertised a month before coming into force.
The ministerial sanction is never given without consultation with the chambers
of commerce concerned and other official bodies. Moreover, rebates and dis-
criminations to the advantage or detriment of any person are prohibited by
law.
As regards the special through rates above referred to, they have been taken
advantage of by the Compagnie Générale Transatlantique for its Havre-New
York traffic, and by the Compagnie des Messageries Maritimes and other lines
engaged in the carrying trade between Marseille and the Orient; but the Fabre
Ține, which is the only French steamship company owning vessels plying be-
tween Mediterranean ports and the United States, has declined until now to
carry goods under the conditions laid down by the tariff in question. The
course followed by the Fabre Line is accounted for by the fact that the steam-
ship lines are not obliged to adopt this tariff in the absence of a definite under-
standing on the subject with the railways concerned. It appears also that,
owing to the keen competition of the Italian, Austrian, and British lines for the
Mediterranean trade, the Fabre Line desires to retain its entire freedom of
action.
REPORT OF VICE CONSUL AT HAVRE.
1
Railway rates in France are established by law and can neither be raised,
lowered, nor modified without Government sanction. They are printed and
published, to be found in every railway station and express office, and are
available to everyone. Issued in a thick quarto volume, the price, including
all lines, is 20 francs ($3.86). No steps have been taken to prevent publication
of any special rates or agreements.
There are three distinct categories of rates: First, inland rate; second, ex-
port rate; third, rates favoring the French flag. The latter, though but very
little lower than the ordinary export rates, are the result of agreements with
certain French steamship companies:
(a) The eastern, western, and northern railway companies give slightly re-
duced rates to all merchandise exported to non-European countries.
(b) The Orleans Railway Co. gives reduced rates for merchandise shipped to
Senegal (West Coast of Africa) and South America.
(c) The Western Railway has, since October 6, 1905, offered a reduction,
though an insignificant one, for merchandise shipped to New York by the
freight, but not the passenger, steamers of the Compagnie Générale Trans-
atlantique.
(d) The Paris-Lyons-Mediterranean Line gives a discount for goods shipped
to Suez, or beyond, by steamers of the Messageries Maritimes Co., by the vessels
of the Société Générale des Transports Maritimes à Vapeur to South America,
and by the Messageries Maritimes, Compagnie Fraissinet, and N. Paquet & Co.
to the Levant.
(e) An unusual reduction of 20 per cent is offered by the Orleans Railway
Co. for goods shipped to Newhaven, England, from St. Nazaire by vessels of the
Compagnie Générale Transatlantique.
Such are the concessions made by certain French railway lines to navigation
companies. It must be observed, however, that the result (if many business
houses are to be believed) is so far from being satisfactory that the latter
prefer to ship under the ordinary, open-to-all conditions, than to profit" (?)
by the reduced rates. It is stated that while goods shipped under ordinary
conditions are dispatched rapidly to their destination, those billed for the re-
duced rate go if there is room.. If not, they may experience delay. This is
sufficient to indicate that in France no particular shipper can consider himself
favored and profits by no prearranged advantages. Indeed, it may be said that,
in view of the innumerable drawbacks, or the reverse side of the picture, as
the French put it, merchants are not keen on taking advantage of reduced
railway rates, preferring rapid transit and quick delivery to discount and delay.
■ Pp. 41-42.
1
FRANCE, ITALY, SPAIN, AND PORTUGAL.
139
Loans to shipowners.-The French Government presented to
Parliament on January 14, 1916, a project aiming to increase the
French merchant marine by providing for Government loans to ship-
building enterprises. The bill authorizes the expenditure by the
Government of 100,000,000 francs ($19,300,000), this expenditure to
be made during the war and during a period of 12 months following
the signing of the peace treaty. The following translation from Le
Temps, Paris, gives the most important passages of the memorandum
accompanying the bill:1
A measure tending to strengthen our merchant marine should be passed
without delay.
While the war lasts we may reap the advantages of being able to benefit
French commerce by recovering, in part, the heavy tribute which we are paying
to foreign shipowners in the form of marine freights.
After the war our maritime commerce will need a number of ships sufficient
to insure a continuation of the services heretofore maintained by our companies
and to make possible the organization of new lines. It is on this condition
only that the economic life of France will be able to recover and to create
large resources necessary for the work of national rehabilitation.
Our ports will be visited by a larger number of ships from now on, and the
free play of economic laws will tend to lower the freights. Furthermore, the
proportion of French tonnage in our foreign trade will be larger, and action
by the Government, if demanded by circumstances, would be of greater effect
in the domain of transportation.
The vicissitudes of war have reduced the effective strength of our merchant
fleet. The strenuous service to which our ships have been subjected since
August, 1914, the resulting wear and tear, the impossibility of reopening our
shipyards before the termination of hostilities, all this compels us, if we would
be ready in time, to obtain without delay a number of ships from other
countries to replace those lost and to supplement those in active service.
In its earnest desire to improve the conditions under which the country pro-
cures its food supply, to stop the waste of the national wealth, and to secure
the future of our merchant marine, the Government has examined various
solutions proposed. It is of the opinion that the end sought can only be
achieved by encouraging private initiative and giving aid to shipowners in
order to induce them to buy ships in allied or neutral countries.
The granting, under proper guaranties, of loans repayable in annual in-
stallments, and the determination of a fixed sum to be paid as indemnity in
case a ship so acquired should be requisitioned by the Government, are the
measures which will best meet the present needs of the shipowners. There
seems to be no doubt of the general utility of these measures, as the shipowners
will be under the double obligation of keeping the ships so acquired as part
of our merchant fleet for five years, at least, and of employing them in the
French import trade until the crisis now prevailing in maritime transportation
shall have moderated.
Some of the provisions of the proposed law are as follows:
Until the expiration of 12 months after the conclusion of peace the Govern-
ment may invest a sum not exceeding 100,000,000 francs in loans to French ship-
owners, to cover a part of the sums necessary for the purchase of ships with
mechanical propulsion, from citizens of allied or neutral countries. The in-
terest to be paid on such loans shall be calculated at the rates charged by the
Bank of France on loans on securities. Navigation companies possessing a
fleet of 20,000 tons or more may receive 70 per cent of the purchase price;
those possessing a smaller fleet, 80 per cent.
After making provision for repayment by the shipowners, the bill provides
that Government experts shall inspect the ships, which must be seaworthy and
in good condition. Article 5 indicates the formalities to be complied with by
the shipowner desiring to obtain a loan, the shipowner being obliged, among
other things, to give the State a first mortgage on the ship after it has been
registered as French.
1 U. S. Daily Commerce Reports, Feb. 11, 1916, p. 616.
140
GOVERNMENT AID TO MERCHANT SHIPPING.
DIRECT AID.
The direct aid extended to French shipping has consisted of con-
struction, repair, and navigation bounties, provided for in the laws
of January 29, 1881, January 30, 1893, April 7, 1902, and April 18,
1906, and of postal subventions granted under individual contracts
entered into from time to time since 1851.
BOUNTIES.
In discussing the shipping bounties or subsidies extended to the
French merchant marine, it has been thought best to consider the
subject by laws instead of by forms of bounty.
LAW OF JANUARY 29, 1881.
The first important law granting bounties or subsidies to ships
operated under the French flag was that of January 29, 1881. The
operation of this law was originally limited to 10 years, but was
later extended to 12 years. The law granted two classes of bounties—
one for the construction and repair and the other for the operation
of ships, and at the same time abolished the practice of giving free
entry to all raw materials used in shipbuilding.
Construction bounties.-The construction bounties (primes à con-
struction) granted by this law to vessels constructed in France, were
paid at the following rates:
Character of construction.
Bounty per gross
registered ton.
Francs. Dollars.
Iron or steel...
Composite a
Wooden-
200 gross tons and over…….
Less than 200 gross tons...
a Iron or steel frame and wooden sheathing.
89 29
60
11.58
40
7.72
20
3.86
10
1.93
In addition, a bounty of 12 francs ($2.32) per 100 kilos (220.85
pounds) was given for new engines, boilers, and auxiliary machinery
and of 8 francs ($1.54) per 100 kilos for new material used in renew-
ing boiler and engine equipment.
Navigation bounties.-The navigation bounties (primes à navi-
gation) were paid only to vessels in the over-seas trade (au long
cours). French-built ships received 1.5 francs ($0.29) per net ton
for each 1,000 miles traveled during the first year's operation under
the law, this amount decreasing annually 7.5 centimes ($0.014) for
wooden and composite (wood and iron) and 5 centimes ($0.01) for
iron and steel ships, while foreign-built ships were entitled to only
50 per cent of these rates. Vessels built in France according to plans
previously approved by the Ministry of the Marine received an
increase of 15 per cent over the above rates.
Results of law.-The law of 1881 remained in force without amend-
ment until the passage of the law of January 30, 1893. During this
FRANCE, ITALY, SPAIN, AND PORTUGAL.
141
period a total of $23,687,126 was paid in bounties to French ship-
owners, $6,110,048 for construction, and $17,577,078 for operation or
navigation.
The amounts expended in the years 1881 to 1893 for construction
bounties are shown in detail in the following table:
1881.
1882..
1883.
1884
1885.
1886.
1887
1888.
1889.
1890.
1891
1892.
1893.
Total...
Years.
Hull.
Engines, etc.
Total.
Tons.
Bounty.
Kilos.
Bounty.
$183, 524
18,478
876,335
68, 502
609,938
47, 218
$131, 615
696, 985
463,577
2,555, 915
$51,909
8, 186, 924
179,350
6, 896, 249
865, 599
146, 361
66,572
864, 491
9,477, 425
217,927
204, 968
20,859
157, 223
3,053, 858
580,084
40, 339
386, 129
8,808, 017
281, 294
60, 704
193,956
21, 629
194, 179
4, 203, 854
427,873
87,115
32,839
300, 122
5,056, 268
589, 519
127,751
42, 458
424, 177
7,400, 620
539,857
165, 343
40, 257
377,783
7,535, 911
540,577
162, 267
42,863
389,355
6, 960, 362
389,548
151, 222
31,587
253, 483
6,388, 124
7,973
136, 065
1,067
2,815
276, 701
5,158
6, 110, 048
474, 668
4,438,073
77,909, 226
1,671, 975
The amounts expended in the years 1881 to 1895 for navigation
bounties are shown in detail in the following table:
1881..
1882..
1883..
1884.
1885..
1886...
1887...
1888.
1889...
1890..
1891.
1892...
1893..
1894...
1895...
Years.
French-built ships.
Foreign-built ships.
Total.
Iron.
Wooden.
Iron. Wooden.
$575, 312
£393,316
1,246, 512
739, 442
$157,019
344, 487
$24,803
$174
161, 461
1,633, 800
1,122
1,018, 805
281,000
331,033
2,962
1,657, 742
1,094, 527
258, 481
301, 303
1,460,485
3,431
995, 096
203, 761
256, 977
1,462, 622
4,651
1,035, 172
165, 329
256,314
1,585, 202
5,807
1, 162, 710
162, 312
254, 194
5,986
1,580, 953
1, 183, 462
107,651
284, 453
1,637, 901
5,387
1,220, 311
90,435
321,554
5,601
1,547, 589
1,090, 557
87,174
362, 405
1, 420, 987
7,453
961, 266
57, 105
397, 216
5,400
1,404, 731
964, 674
57,682
374, 468
7,907
356,795
235, 488
20, 411
98,373
2,523
6, 243
206
2,246
773
2,946
278
74
132
17,577,080 12,097, 146
Total..
1,993, 620 3,427,500 58,814
The law of 1881 did not bring about a permanent increase in the
total tonnage of the French merchant marine, for the total tonnage
in 1893 was only 895,423 as compared with 914,373 in 1881. The law
did, however, produce a substantial increase, 187,062, or 60 per cent,
in steam tonnage.
In 1881 the French merchant marine had 735 steamships with a
tonnage of 311,779 tons. In 1893, when the law expired, the French
merchant marine comprised 1,186 steamers with a tonnage of 498,841.
In the first three years after the law went into effect the number
of steamers increased from 735 to 938 and the tonnage from 311,779
to 511,072. In the remaining nine years of the law, the tonnage of
steamers declined slightly, although the number continued to increase.
142
GOVERNMENT AID TO MERCHANT SHIPPING.
During the operation of this act the tonnage of sailing vessels under
the French flag declined steadily from 602,594 tons in 1881 to 396,582
tons in 1893.
Much of the benefit that might otherwise have accrued to French
shipbuilders was lost by reason of the fact that a large proportion
of the vessels added to French registry under this act were of for-
eign construction, many of them being old ships. In many cases
the higher cost of building ships in French yards more than offset
the construction bounty as well as the higher navigation bounty
paid to French-built ships.
According to a number of authorities the French constructors took
advantage of the opportunity afforded by the law and arbitrarily
increased the price of ships so as to absorb practically all of the
higher rate of navigation bounty paid to French shipowners. At
any rate, the increased cost of French-built ships was a source of
great dissatisfaction.
The law was unsatisfactory in particular to the owners of wooden
sailing vessels and was regarded generally as a failure. It was
superseded by the law of January 30, 1893, which made a number
of radical changes.
LAW OF JANUARY 30, 1893.
Construction bounties.The law of January 30, 1893, increased
the construction bounties from 60 francs ($11.58) to 65 francs
($12.55) per ton for iron or steel ships. The bounties on wooden
ships were also increased, a grant of 40 francs ($7.72) per ton
being given to ships of 150 tons or more instead of 20 francs ($3.86)
for ships of 200 tons or more and of 30 francs ($5.79) per ton to
ships of less than 150 tons instead of 10 francs ($1.93) for ships of
less than 200 tons. The bounty on composite vessels was made the
same as that on wooden ships.
The bounty for new engines, boilers, and auxiliary machinery was
increased from 12 francs ($2.32) to 15 francs ($2.90) per 100 kilos.
This law provided also a bounty on materials or parts used in repairs
of hulls, boilers, engines, etc., equal to 15 francs ($2.90) per 100 kilos
of materials used instead of only 8 francs ($1.54) for boiler and
engine repairs.
Navigation bounties.-The law of 1893 abolished the navigation
bounty to all foreign-built ships, to French-built sailing vessels of
less than 80 tons gross, and to French-built steamships of less than
100 tons gross. It changed, without materially increasing, the
bounty to French-built steamships from 1.50 francs ($0.29) per
net register ton to 1.10 francs ($0.212) per gross register ton per
1,000 miles while increasing the bounty to French-built sailing ships
from 1.50 francs ($0.29) to 1.70 francs ($0.328) per gross register
ton per 1,000 miles. These bounties were reduced annually as fol-
lows: Wooden steamers, 6 centimes ($0.0116); iron or steel steamers,
4 centimes ($0.0077); wooden sailing ships, 8 centimes ($0.0154);
and iron or steel sailing ships, 6 centimes ($0.0116). No vessel more
than 15 years old could receive a bounty.
Vessels in the over-seas trade (au long cours) received the full
rates, while those in the international coasting trade (cabotage in-
ternational) received two-thirds of the rates specified. Under the
FRANCE, ITALY, SPAIN, AND PORTUGAL.
143
law of 1881 vessels in the international coasting trade received no
navigation bounty. Vessels built according to plans approved by
the Ministry of the Marine received a bounty 25 per cent above the
regular rate, instead of 15 per cent as under the law of 1881. All
vessels receiving navigation bounties were subject to requisition in
time of war-a new feature.
Results of law. The law of 1893 proved to be even more unsatis-
factory in its operation than the law of 1881. During the first five
years the law was in force the number and tonnage of steamers con-
tinued to decline while the number and tonnage of sailing vessels
increased only slightly. In the last four years of operation there was
a moderate increase in steam tonnage and a considerable increase in
sailing tonnage. In the period from 1893 to 1901 the total tonnage
of steamers increased from 498,841 to 546,541, and the tonnage of
sailing vessels from 396,582 to 564,447 tons, while the total amount
paid in construction bounties was $9,023,781 and in navigation
bounties $20,125,270.
The operation of this law soon demonstrated the lack of wisdom
in abolishing the half bounties granted to foreign-built vessels by
the law of 1881. It was discovered also that the navigation bounties
accorded sailing vessels were so high as to produce a fleet of huge
sailing vessels which sailed round and round the world, much of
the time in ballast, and to encourage the establishment of ship-own-
ing companies which existed alone on the high bounty given to sail-
ing vessels.¹ It is not surprising, therefore, that this law was super-
seded nearly a year before the time set in the law.
The following table shows the amounts paid in construction
bounties under this law in the years 1893 to 1913:
New construction.
Wooden ships.
Years.
Total
construc-
tion
bounties.
Total Under 150 tons
bounty.
gross.
Iron or steel ships.
New engines, boil-
ers, etc., and renew-
als of same.
150 tons gross
and over.
Tons. Bounty. Tons. Bounty. Tons. Bounty.
Kilos.
Bounty.
1893...
1894...
$407,721
403, 236
$304,137
246,111
9,829
9, 161
$54,636
3,345
$24,792
18, 659
$224,709
3,727,100
$103, 584
50,918
3,225
23,902 | 14,223
171,291
5,653,591
1895...
540, 530
339,540 11,002
157,125
61,155
3,048
22,592 21, 240
255,793
7,231,930
1896...
200, 990
792,525
594,780 | 11,667
64,851
2,964
21,969 | 42, 178
507,960
7,115, 200
197,745
1897..
1898....
993, 142
890, 473
1899....1,363,390
825,968
13. 181
73,265
4,898
36,301 59,484
716,402 | 6,015, 165
167,174
651,795
9,327
54,006
4,225
32,617 | 45,052
565,172 | 8,244, 480
1,123, 390
7,698
238, 678
44,573
4,664
1900....1,794, 229
1,550, 122
8,313
48, 130
4,695
1901.... 1,838, 625
1,607, 757
8,720
48,467
6,392
1902....2,
2,944, 185
2, 679, 848 (217,904
2, 577, 980
577,980
6,723
36,003 83,126
36,247 116, 839
47,376 125,541
49,261 9,607
1,042, 814
1,465, 745
1,511,914 |
52,607
8, 290, 166
240,000
432, 015
8,306,997
9, 243, 367
244, 107
230,868
1903....1, 153, 420
893, 277
264,337
10,673
58,088
7,810
56,677 66,019 778, 512
9,559, 524
1905....1,034,
104
1904....1, 669,029 |1,323, 893
800, 513 10,609
8,418
45,816
260, 143
6, 941
50,372 104,111
1,227,705
12,682,783
345, 136
57,743
4, 113
29, 844
60, 457
712,926
1906....
575, 577
351,938
8,583, 816
233,591
3,524
19, 180
881
1907....
152, 480
90,716
15
89
484
6,396
3,733
27,676
326,362
8, 218, 107
223, 639
6,927
86,894
1908...
329,999
2,133, 457
232, 172
61, 764
5
19,686
1909....
36, 921
232,167 | 3,594, 843
2,139
97,827
29
159
168
1,980
1910....
36,261
1,278, 140
34,782
978
9
47
79
931
1,296, 565
1911....
1912...
30,999
1,535
35, 283
1
8
122
1,527
1913 *.
32,759
42,513
1,017, 747
29,464
320
14,449
27
320
1,192,045
32, 439
23
170 1,211
14,279 | 1,031,267
28, 064
1 The French Mercantile Law of 1906 and its Predecessors. Report by British Consul General at
Havre. British Diplomatic and Consular Reports, Miscellaneous Series, No. 651, p. 5.
2 Provisional.
144
GOVERNMENT AID TO MERCHANT SHIPPING.
The navigation bounties granted by the law of January 30, 1893,
continued to be paid to ships entitled to the same long after the
law had been superseded. In 1913 the amount paid in naviga-
tion bounties under the law of 1893 was $189,310, the greater part of
which was paid to sailing ships, for whose benefit in particular cer-
tain features of the law of 1893 had been continued. The following
table shows in detail the amounts paid out in the years 1893 to 1913
for navigation bounties under the law of January 30, 1893:
Ocean-going ships.
Years.
Total
navigation
bounties.
Steamers.
Sailing ships.
Ships in interna-
tional coasting
trade.
Tons.
Bounty.
Tons.
Bounty.
Tons.
Bounty.
1893.
1894
$1, 171, 859
343,999
$792, 026
1,515, 810
111, 952
1895
314, 425
$165, 228
1,003, 904
457,933
1,656, 112
118,686
$214, 605
1896..
400, 672
243, 461
1, 118, 505
466,982
1,847, 923
116, 645
268, 445
270, 850
1897..
332, 216
1,211, 677
499, 537
1898..
2, 187, 263
121, 520
266, 757
321,579
357,699
1,271, 935
484, 968
148, 178
2,277, 541
1899.
297, 479
638, 848
278, 547
1,219, 524
536, 524
1900.
2,556, 445
159, 966
320, 942
839, 118
276, 780
1901.
2,950, 543
1,353, 077
491, 740
196, 116
218, 899
345, 190
012, 309
1,306, 415
515, 518
3, 521, 622
284, 134
191,056
1902..
329, 277
1,474, 509
1,356, 608
484, 174
3,819, 602
361, 396
169, 619
1903..
308, 790
1,988, 948
1904..
4,092, 428
. 1, 321, 176
587,932
434, 006
176, 069
239, 800
2,343, 581
517, 616
920, 990
1905..
4, 190, 732
513, 121
154, 845
101, 517
3,088, 841
780, 659
427, 460
3,647, 902
481, 081
1906.
108, 428
3,343, 277
82,597
678, 523
324, 073
1907
3, 459, 199
469, 222
66,796
96, 014
2, 910, 118
522, 055
324, 811
1908.
3, 003, 441
476, 245
59,261
83, 356
2, 888, 347
490, 397
310, 274
1909.
2, 508, 747
426, 531
67, 225
2,472, 722
48, 797
302, 962
301, 057
1910..
2, 142, 794
370, 309
40, 322
47, 001
2, 176, 858
210, 587
199, 814
1911
1,901, 504
324, 298
30, 832
29,905
1,920, 304
136, 150
186, 772
1912..
1, 137, 689
294, 481
22, 676
22, 991
85,994
1,746, 079
172, 087
1913 a..
561, 019
235, 819
19,275
5,422
1,042, 934
2,492
92,536
189, 310
168, 735
8, 761
10,970
555, 739
80, 439
42,773
79,312
2,788
108, 871
a Provisional.
LAW OF APRIL 7, 1902.
Construction bounties.—The law of April 7, 1902, continued with-
out change the construction bounties granted by the law of January
30, 1893. It was provided, however, that ships constructed under the
later law could not receive the bounty if constructed in any yard
employing more than 20 per cent foreigners.
Navigation bounties. The new law provided two classes of navi-
gation bounties, one for French-built ships and the other for vessels
of foreign construction. The bounty for the former was designated
as a "prime à navigation" and for the latter as a "compensation
d'armement," but the practical effect was the same in both cases. It
will be noted, therefore, that it was deemed expedient to revert to
the policy, even if under a new name, of paying navigation bounties
to foreign-built ships operated under the French flag.
The navigation bounties (primes à navigation) granted by the law
of 1902 were limited to French-built merchant ships, sail as well as
steam, operating under the French flag in the overseas and inter-
national coasting trade, the latter receiving only two-thirds of the
full bounty. These bounties were payable only to ships of at least
100 tons gross register and less than 15 years old.
FRANCE, ITALY, SPAIN, AND PORTUGAL.
145
An additional requirement was that the ship should carry between
its departure from a French port and its return thereto a cargo
representing in freight tons at least one-third of the net tonnage of
the vessel for at least one-third of the voyage.
These bounties were to be paid to any vessel constructed in France
during the operation of the law¹ for a period of 12 years after its
admission to French registry. This accounts for the fact that as late
as 1913 considerable amounts were expended in navigation bounties
under the law of April 7, 1902. It will be remembered that under
the law of January 29, 1881, the navigation bounty was payable only
during the period of the operation of the law.
The navigation bounty for steamships of not more than 3,000 tons
gross register was fixed at 1.70 francs ($0.328) per ton per 1,000
miles of operation during the first year, with an annual reduction
of 4 centimes ($0.0077) during the first four years, 8 centimes
($0.0154) for the next four years, and 16 centimes ($0.0308) for the
next four years. For steamers of 3,000 to 7,000 tons the basic rate of
1.70 francs was reduced by 1 centime ($0.00193) for every 100 tons
or part thereof in excess of 3,000 tons, but the rate in the first year
could not be less than 1.50 francs ($0.2895) per ton. Vessels of
more than 7,000 tons were to receive the same bounty as vessels of
7,000 tons.
For sailing vessels the maximum bounty in the first year was to be
the same as for steamships, namely, 1.70 francs ($0.328) per ton per
1,000 miles of operation, but the annual decrease was to be 2 cen-
times ($0.0039) for the first four years, 4 centimes ($0.0077) for
the next four years, and 8 centimes ($0.0154) for the last four years
of the act. Sailing vessels of more than 600 tons net but less than
1,000 tons were to receive the full bounty less 10 centimes ($0.0193)
for each 100 tons or fraction thereof above 600 tons, while sailing
vessels of over 1,000 tons were to receive the same bounty as steam-
ships of 3,000 tons or less.2
•
A deduction of 5 per cent was made from the full bounty if the
vessel had a speed of 11 but less than 12 knots, and of 10 per cent if
the speed were less than 11 knots, while vessels of less than 10 knots
were barred from the bounty.
Sailing vessels of French construction operating under the French
flag at the time the law of April 7, 1902, went into effect, were given
the privilege of continuing under the navigation bounty provided
in the law of January 30, 1893, but such vessels must carry during
at least two-fifths of the entire voyage cargo representing in freight
tons at least two-thirds of their net tonnage.*
3
A deduction of 6 per cent from all navigation bounties was to be
made for the benefit of seamen's charitable institutions.5
Equipment bounties.-The act of 1902 restored navigation bounties
to foreign-built vessels, but the bounty took the form of an equip-
ment bounty (compensation d'armement) based upon number of days
in commission and not upon the length of voyage. The new bounty
was granted only to foreign-built seagoing steamships of more than
41987°—16————————10
1 Law of Apr. 7, 1902, art. 3
2 Idem, art. 5.
* Idem, art. 12.
• Idem, art. 13.
Idem, art. 4.
146
GOVERNMENT AID TO MERCHANT SHIPPING.
100 gross tons, constructed of iron or steel, engaged in the overseas
or international coasting trades, and equipped and owned in France.¹
This bounty was based on total gross tonnage 2 of vessel and num-
ber of days in commission, and consisted of a daily allowance of 5
centimes ($0.0097) per total gross ton up to 2,000 tons, 4 centimes
($0.0077) additional for each ton up to 3,000 tons, 3 centimes
($0.0058) additional for each ton up to 4,000 tons, and 2 centimes
($0.0039) additional for each ton above 4,000 tons and up to 7,000
tons, no allowance being made for tonnage in excess of 7,000. Pay-
ment was limited to 300 days per year.
Vessels in the international coasting trade received only two-thirds
of the full bounty.
Although this bounty was intended primarily for foreign-built
ships operating under the French flag, the law of April 7, 1902, pro-
vided that steamships of French construction should have the privi-
lege, under conditions to be fixed by administrative regulations, of
choosing for each voyage between the equipment bounty and the
navigation bounty.
8
The requirements as to age and speed of vessels were the same for
equipment bounties as for navigation bounties. Vessels more than
12 years old and those of less than 12 knots could not receive either
bounty. Other classes of vessels debarred from these bounties were
the following:
I. Ships which prior to the promulgation of the law of 1902 were
registered after their seventh year.
II. Ships engaged in overseas and domestic fishing (grand pêche
and petit pêche) or pleasure navigation, as well as those receiving
postal subventions.
III. Ships engaged exclusively in the same voyage in reserved
navigation.
IV. Ships making a voyage of less than 125 miles between a French
and a foreign port.
V. Ships engaged in reserved navigation which make stops in
foreign ports without discharging or loading merchandise repre-
senting in tons of freight at least one-third of their net tonnage.
VI. Ships which between their departure from a French port and
their return thereto have not carried a cargo representing in freight
tons one-third, at least, of their net tonnage, and that upon at least
one-third of the total voyage.
VII. Ships, which, having obtained French registration, have
given it up and then secured it a second time.
VIII. Ships of foreign origin which were mortgaged for more
than one-half of their value at the time of their registration in
France or during six months thereafter.
Ships operating on the same voyage in both the international and
the national coasting trade (e. g., between a French or Algerian port
on the Mediterranean and a French port on the Atlantic or on the
English Channel or North Sea, or vice versa) were entitled to the
navigation or equipment bounty for the time or for the voyages in
which goods had been carried in international trade, if the total
1 Law of Apr. 7, 1902.
66
99
""
2 The term total gross tonnage is used for the first time in the law of Apr. 7, 1902,
and is to be distinguished from gross tonnage by the fact that it includes spaces used
for water ballast, galleys, etc., which are exempted from gross tonnage.
Law of Apr. 7, 1902, art. 6.
FRANCE, ITALY, SPAIN, AND PORTUGAL.
147
cargo for foreign destination or of foreign origin on board at the
time of the passage through the Straits of Gibraltar represented in
freight tons at least one-third of the net tonnage of the vessel.¹
Ships in the international coasting trade plying in the same voyage
between ports of France and Algeria and a port in northern Europe
were given the bounty if the total amount of cargo of foreign origin
or for foreign destination on board when the ship passed through the
Straits of Dover represented in freight tons at least one-third of the
net tonnage of the vessel.
Ships operating in the over-seas trade with a French or Algerian
port as the port of departure or destination were entitled to a por-
tion of the navigation or the equipment bounty for the voyage or
voyages between French and Algerian ports in case they stopped in
one or more French or Algerian ports and loaded or discharged only
over-seas merchandise in such ports. The portion of the bounty
granted was to be equal to the ratio between the number of tons of
over-seas freight on board and the net tonnage of the ship. If the
ratio was 100 per cent or more, the whole amount of the bounty
should be paid.
The law of 1902 was enacted for a period of 12 years, and unlike
the preceding two laws limited the total tonnage of. vessels which
might benefit by it as well as the total amount of bounty to be
granted. The tonnage of steamships admitted to the benefit of this
law in addition to the tonnage receiving the benefits of the prior law,
was limited to 500,000 gross tons, of which 200,000 tons might be
built abroad, while the tonnage of sailing vessels was limited to
100.000 gross tons.2
The total amount payable in navigation and equipment bounties
during the operation of the law was fixed at 150,000,000 francs
($28,950,000), of which not more than one-tenth could be paid to
sailing vessels. The maximum amount voted for construction boun-
ties was 50,000,000 francs ($9,650,000), to be paid on not more than
300,000 tons of steamships and 100,000 tons of sailing vessels.
Results of law. Some of the effects of the law of 1902 are de-
scribed in the following terms by M. Millerand in his report to the
Extra-Parliamentary Committee: *
4
The limitations introduced into the law of 1902 and their incongruity pro-
duced unexpected and disastrous results which even threatened the existence
of French building yards. Part of the workmen were discharged, the others
threatened with idleness, and the mercantile marine in danger. The sum neces-
sary to pay bounties on the 600,000 tons of shipping legislated for should
have been £9,548,000, whereas it was limited by the law to £6,000,000, being a
deficiency of £3,548,000 on the amount required for the law to have its full
desired effect. Consequently the tonnage which could benefit under the law
instead of being 600,000 tons could only be 273,221 tons, divided as follows:
Four thousand and forty-one tons of sailing vessels, 233,544 tons of foreign-
built steamers, and 35,636 tons of French-built steamers. The consequence of
this discrepancy between the amount given by law and the amount actually
required was a regular rush to get first place in the building yards. Ship-
owners hurried in their orders, shipbuilders hurried the laying down in order
to grasp their share of what the law offered them. In this hurry it was not
possible to take into consideration the state of the market which, by reason of
the lowness of freights, would most certainly have prompted them, had they
1 Law of Apr. 7, 1902, art. 5.
* Idem, art. 7.
* Idem, art. 23.
• As_translated in British Diplomatic and Consular Reports, No. 651 (May 4, 1906),
pp. 6-7.
148
GOVERNMENT AID TO MERCHANT SHIPPING..
not been tied to time, to spread out their orders and their shipbuilding over a
much longer space of time.
:
Less would have been built during the infancy of the law, but building would
have been carried on without interruption to the end. The effect of the law
was therefore once and for all exhausted. Not a ton more than 280,000 tons,
which have been built, can benefit by the bounties until a change is made in the
law. If it is true, as has been estimated, that by the natural order of breaking
up, accidents, and sales, 60,000 tons are taken away annually from the mer-
cantile navy, it will have lost in 10 years 600,000 tons and gained 280,000 tons;
that is a dead loss of 320,000 tons.
The total amounts expended annually for navigation bounties un-
der the law of April 7, 1902, in the years 1902 to 1913 are shown
by class of ships in the following table.¹ It will be noted that the
payments under this law were greater in the years following the
passage of the law of April 18, 1906, than in the preceding years.
The law of 1906 did not entirely supersede the earlier law, since
article 9 of the latter law provided that "vessels which are now in
commission under the French flag, those which may be nationalized
before the promulgation of this law, as well as those which have
been the subject of a declaration of priority, in order to benefit by
the provisions of the law of April 7, 1902, shall remain subject to the
laws under the provisions of which they have been placed." (Ap-
pendix B.)
Ocean-going ships.
Years.
Total
bounty.
Steamers.
Sailing vessels.
Ships in interna-
tional coasting
trade.
Tons. Bounty.
Tons. Bounty.
Tons.
Bounty.
190?..
1903.
1904..
$151, 391
841,968
1,394, 804
24,960
$139,988
8,370 $11,403
92,922
793,591
10,643
27,634
63,981
152, 805
$20, 743
1905...
1,304, 388
6,688
21, 207
2, 313, 314
104, 432
227,073
69,210
1906...
2,204, 510
6,299
2,471, 248
22, 330
162, 840
278, 561
1907.
2,360, 500
86, 474
4,728
2,646, 422
11, 133
190,840
284, 365
99, 615
1908...
2,541, 033
2,876
2,509, 597
8,920
202, 113
1909...
275,370
2,401, 361
96, 469
1,869
2, 329, 923
5,434
182, 297
271, 887
102, 802
1910...
2,212, 893
1,005
4, 151
2, 177, 767
209, 083
272, 165
1911...
2,069, 320
112,879
765
2,034,973
4, 438
203, 460
263, 271
104,009
1912....
1,932, 313
765
1,773, 690
4,911
257,363
209, 157
97.749
1913 a..
1,691, 764
163
400
1,416, 937
211, 142
239, 764
81,525
1,347, 251
163
196
184,562
69,490
• Provisional.
The annual expenditures for equipment bounties under the law of
April 7, 1902, during the period those bounties were in effect, namely
1902 to 1906, are shown in detail in the following table: 2
1903....
1904....
1905....
1906...
Total..
Years.
Ocean-going ships.
Total
bounty.
Ships in interna-
tional coasting
trade.
Tons. Bounty. Tons. Bounty.
$8, 234
8,659
$7,053
30, 030
2,942
14,076
$1, 181
15,590
47,600
16,870
17,610
14,440
25, 226
34, 293
18, 382
20,533
22,374
23, 405
12, 423
10,888
120, 157
€0, 878
71,274
50,617
48, 883
Pt. II. p. 73, for year 1902,
1 Tableau Général du Commerce et de la Navigation, 1902.
and 1913. Pt. II. pp. 76-79, of Tableaux Analytiques, for years 1903 to 1913.
Idem, 1913. Pt. II, pp. 76-79 of Tableaux Analytiques.
FRANCE, ITALY, SPAIN, AND PORTUGAL.
149
LAW OF APRIL 18, 1906.
The system of bounties now in operation in France is based largely
on the law of April 18, 1906, and such provisions of the laws of
January 30, 1893, and April 7, 1902, as are not repugnant thereto.¹
The law of April 18, 1906, has been supplemented by the law of
February 28, 1912,2 providing for the continuance in favor of sailing
vessels of certain benefits under the law of 1893, and articles 19-21 of
the decree of September 21, 1911, extending the system to the mer-
chant marine of the French colonies.
4
Construction bounties.-The construction bounties granted by this
law are considerably larger than those of the previous law for steam-
ships and sailing vessels with iron or steel hull and the same for
wooden ships. Thus, steamers with iron or steel hulls receive 145
francs ($27.99) per total gross ton instead of 65 francs ($12.55) as
formerly, and sailing vessels 95 francs ($18.34) per ton instead of 65
francs ($12.55). All vessels, both steam and sail, with wooden hulls
and of more than 150 tons register receive 40 francs ($7.72) per ton,
while those of less than 150 tons register receive 30 francs ($5.79),
these rates being the same as in the previous law.
These bounties decrease annually during the first 10 years, after
which they remain fixed. In the case of steamers the annual decrease
is 4.5 francs ($0.87) per ton, and in the case of sailing vessels, 3
francs ($0.58). This will make the final rate in 1917 100 francs
($19.30) for steamers and 65 francs ($12.55) for sailing vessels.
Larger bounties for boiler and engine construction are also pro-
vided for in the law of 1906. For new boilers and engines the rate is
27.5 francs ($5.31) per 100 kilos, instead of 15 francs ($2.90) per
100 kilos, as in the former law. New parts for the repair of boilers
and engines receive a bounty of 20 francs per 100 kilos ($1.75 per
100 pounds) as compared with 15 francs ($2.90) per 100 kilos in the
former law. In the case of new boilers and engines the bounty de-
creases annually at the rate of 75 centimes ($0.145) per 100 kilos
for a period of 10 years.
5
The bounty for construction is granted for every seagoing ship
built in French shipyards, except those in which more than 10 per
cent of the workmen are foreign citizens. Under the law of April
7, 1902 (art. 18), this minimum was 20 per cent. A law of April
8, 1910 (art. 114) provides that a construction bounty shall be
granted for tugs, dredges, and pleasure boats as well as for ships
used in the transportation of freight and passengers.
In the case of vessels built in accordance with postal-subvention
contracts then in force, the construction bounties granted by the law
of April 18, 1906, are the same as those given in the law of January
30, 1893, namely, 65 francs ($12.55) per net ton for hull and 15 francs
($2.90) per 100 kilos for engines, etc.
6
The bounty is paid directly to the shipbuilder and in most cases at
once. Under the former system an advance was made by the ship
1 Law of Apr. 18, 1906, art. 16.
* See also law of Apr. 18, 1906, art. 8.
Bulletin Officiel, Dec. 23, 1911; also in Revue internationale du droit maritime,
vol. 27, p. 607.
• Total gross tonnage differs from gross tonnage in that it includes certain spaces,
such as those used for water ballast, galleys, and auxiliary equipment, which are exempted
from gross-tonnage measurement.
*Law of Apr. 18, 1906, art. 19.
• Idem, · art. 10.
150
GOVERNMENT AID TO MERCHANT SHIPPING.
operator to the shipbuilder and the former was reimbursed by the
Government in 10 or 12 years. Regarding this method of payment,
Prof. Ripert makes the following comment: "The new system appar-
ently burdens the budget greatly, but it does away with the payment
of interest and no longer mortgages the future." ¹
The initial payment is made when the ship is registered and consists
of the full amount in the case of wooden ships and seven-tenths of the
full amount for all other ships built for domestic account. Ships
built for foreign order receive only seven-tenths of the total bounty
granted, which is paid at the time of its dispatch. In the case of ships
for French citizens the remainder of the bounty is paid as follows:
Two-tenths one year after registration and one-tenth at the end of the
second year.2
No deductions are made from the construction bounty. The deduc-
tion of 6 per cent made under the law of April 7, 1902 (arts. 4 and
21), in favor of the Caisse de prévoyance has been replaced in the
law of 1906 (art. 7) by a direct payment by the Government.
The manner in which the rate of construction bounty was deter-
mined by the French Parliament is indicated in the following extract
from a British consular report.
3
The reasonings by which the amounts of the building bounties are arrived
at are not without interest, especially to British builders. In examining with
care the manner in which the bounties accorded by the law in 1902 were allotted,
it was observed that a part of the bounties neither went to building nor equip-
ment, but to other industries. That is, there was in a way a leakage in the
system of distribution. This did not apply to construction bounties, which are
received directly by the builders, but to navigation bounties, which are only
paid to vessels built in France. By giving his order, therefore, to a French
builder the owner derives a benefit which he could not otherwise enjoy, and it
is, therefore, only reasonable that he should recognize this advantage by agree-
ing to pay a higher price for his vessel than he would do abroad. Part of the
navigation bounty thus goes to the builder in the form of increase in price, and
that is the result foreseen and desired by the law. It is indirect protection given
to French shipbuilding. But the increase in price accepted by the owner re-
quires of him a corresponding increase in his expenses as interest on capital and
insurances, so that part of the navigation bounty received by him really goes
into the purses of bankers and insurance companies. That is where the leakage
is. This may be well illustrated thus: A cargo steamer of 5,000 tons costs
in the United Kingdom about £48,000 ($233,592) and in France £72,000 ($350,-
388), say a difference of £24,000 ($116,796). A French shipowner ordering a
vessel to be built in France under conditions which will give him a right to
the navigation bounty ought, therefore, to get out of it:
1. The difference in cost of building.
Items.
2. The interest on above during 20 years (the normal life of a ship) at 5 per cent..
3. The insurance on the increase during 20 years at an average rate of 34 per cent on
the original value………
Total.
Pounds
sterling.
Dollars.
24,000
116, 796
24,000
116, 796
16,800
81, 757
64, 800
315, 349
The aggregate of the bounties that the owner of a vessel of the above ton-
nage would receive under the law of 1902 amount to about £112,000 ($545,048).
Of that sum £64,800 ($315,349) are required to balance the highest price of
French shipbuilding, but while only £24,000 ($116,796) of that sum goes to
the French builder, the greater part of it, namely £40,800 ($198,553), goes
¹ Ripert: Droit Maritime, Vol. I, p. 153.
2 Law of Apr. 18, 1906, art. 3.
The French Mercantile Marine Law of 1906 and its Predecessors. British Diplo-
matic and Consular Reports, Miscellaneous Series No. 651 (May, 1906), pp. 7–9.
FRANCE, ITALY, SPAIN, AND PORTUGAL.
151
to capitalists and insurance companies. The question was how to economize
this supplementary and, under the law of 1902, necessary expense. The answer
appears to be by allowing French builders to lower their prices to the level
of their foreign competitors. By giving to French shipbuilders over and above
the construction bounty of 1902, the object of which was to balance the cus-
toms duties on materials imported, a building subvention sufficiently large to
allow them to give French owners the same terms as foreign shipbuilders.
Construction and outfit would thus be quite distinct, and the leakage above
mentioned would be stopped. French shipbuilders were therefore invited to
state what conditions they would consider necessary to enable them to build
a vessel at the same price as foreign shipbuilders with whom they have to com-
pete. The replies were to the effect that the construction bounty should be in-
creased from 65 francs ($12.55), the actual rate, to 165 francs ($31.85) per
ton, and for engines and boilers from 15 francs ($2.90), actual rate, to 35
francs ($6.76) per 100 kilos, these figures to be free of the 6 per cent deduc-
tions in favor of charitable institutions. The causes of the dearness of French
shipbuilding over that of foreign countries were stated to be the price of pri-
mary material used in shipbuilding, the inferior productiveness of the French
workman, and the dearness of general expenses resulting from the paucity of
orders given to French yards.
In order to arrive at the fair amount of bounty which would enable French
shipbuilders to compete with those abroad, the committee appear to have insti-
tuted a strict comparison between the cost of steamers built in France and
those built in the United Kingdom, and, after comparing the cost of 49 Frenchi
vessels built from 1899 to 1902 with 37 vessels built in the United Kingdom in
1902 and 1903, they arrived at the conclusion that the average apparent dif-
ference in price between the British and the French vessels was only £2 4s.
($10.70) per ton, and the actual average difference-arrived at by adding the
construction bounty of 76 francs ($14.67)—131 francs ($25.28) per ton. The
directors of customs, however, worked out the difference in price between the
British and French built vessels and found that the average price per ton in
the United Kingdom was 249 francs ($48.06), while in France it was 348 francs
($67.16), making a difference of 99 francs ($19.10) in favor of British-built
ships, to which must be added the value of the construction bounty, viz, 76
francs ($14.67), which brings the extra cost of French-built vessels up to 175
francs ($33.78) per ton. The committee, however, found that the difference
was not wholly exact, and that various conditions of form, construction, and
date rendered the comparison inexact, and that whereas the value of a ton
in the United Kingdom in 1902 was 293 francs ($56.55) in 1903 it was not
higher than 241 francs ($46.51). They therefore arrived at the conclusion that
the actual difference was more probably 131 francs ($25.28), as stated above.
However, as this might be too narrow a margin, and taking into account the
crisis in French shipbuilding yards, and recognizing the necessity of giving
them as much protection as possible in the circumstances, the committee fixed
upon the sum of 172 francs 50 centimes ($33.29), which was to include the con-
struction bounty on hull and machinery.
Equipment bounties.-The designation of equipment bounties
(compensation d'armament), which was used for the first time in the
law of 1902 to indicate a form of navigation bounty for foreign-built
ships, covers in the law of 1906 navigation bounties both to French-
built and to foreign-built ships.
Article 4 of the law of 1906 provides that equipment bounties shall
be paid to all seagoing vessels of French or foreign construction,
less than 12 years old, having a total gross tonnage of at least 100
tons, and operated in the over-seas or international coasting trades.¹
In favor of the payment of equipment bounties to ships operating
in the international coasting trade as well as to those in the over-
seas trade, Prof. Ripert, in his recent work on maritime law,' says:
2
This provision makes a simple solution, since a ship may on the same voyage
operate in both the coasting and the over-seas trade, and it is more just than the
1 Art. 15 of the law of Apr. 18, 1906, provides that the limits of the international
coasting trade shall include Iceland.
Ripert: Droit Maritime, vol. I, p. 156.
152
GOVERNMENT AID TO MERCHANT SHIPPING.
former provision, since ships equipped for the international coasting trade must
pay the same charges and run the same dangers as boats in the over-seas trade;
in fact, they are even more exposed to dangers because of the frequency with
which they dock.
Although equipment or navigation bounties are paid to foreign-
built as well as to French-built ships, there is a strong limitation
upon the purchase of ships abroad in the provision that the bounty
shall be paid to foreign-built ships only if they shall have been reg-
istered in France within two years after construction.
This provision has been strongly objected to on the ground that it
keeps French ship operators from purchasing secondhand vessels
abroad at bargain prices. It has been urged, on the other hand, that
it is the duty of the Government to encourage the acquisition of
modern ships, since they are more efficient and are a better advertise-
ment of the commercial strength of a country; that the capital out-
lay is greater for the purchase of a new ship than for an old one,
while the operating expenses may be quite as high; and that it is
therefore the duty of the State to protect purchasers of new ships
and not those who "have tried to make a good business deal in buying
out-of-date vessels at bargain prices.
"" 1
The equipment bounties of the law of 1906 vary with the tonnage
of vessel, days in commission, character of propelling power (whether
sail or steam), speed, quantity of cargo, and average daily run.
They are paid for the entire time the ship is in commission and are
not limited to 300 days per year, as was the case under the law of 1902.
For steamers the grant is 4 centimes ($0.00772) per ton per day
for the first 3,000 tons, 3 centimes ($0.00579) additional for each ton
between 3,000 and 6,000 tons, and 2 centimes ($0.00386) additional
for each ton between 6,000 and 7,000 tons.2 No bounty is paid on
tonnage in excess of 7,000 tons.
For sailing vessels the amount granted is 3 centimes ($0.00579) per
ton per day up to 500 tons, 2 centimes ($0.00386) additional for each
ton between 500 and 1,000 tons, and 1 centime ($0.00193) additional
for each ton in excess of 1,000 tons.³
An exception to the age limit of 12 years is made in the case of
sailing vessels that were constructed in accordance with the law of
January 30, 1893, and admitted to French registry before November
1, 1901, and comply with the other provisions of the present law.
Such vessels are entitled to equipment bounty at the rate of 3 cen-
times ($0.00579) per gross ton per day in commission for a period
of three years from the time they cease to benefit under the law of
1893. They must, however, show that they have carried during at
least two-fifths of their total voyage cargo representing in freight
tons at least two-thirds of their net register tonnage.
No limit is placed on the tonnage of ships receiving bounties under
this law. It will be remembered that under the law of 1902 a
bounty was not paid on tonnage in excess of 7,000 tons.
These bounties are on the whole slightly lower than those pro-
vided in the law of 1902, but they are net. The Government now
provides directly the sums necessary for the operation of the Caisse
des Invalides and of the Caisse de prévoyance, which were formerly
raised by means of deductions from the bounties.
1 Ripert: Droit Maritime, Vol. I, p. 155.
2 Law of Apr. 18, 1906, art. 4.
* Idem, art. 8.
FRANCE, ITALY, SPAIN, AND PORTUGAL.
153
The former navigation bounty being based upon the number of
miles operated and the speed of the vessel, encouraged the use of fast
ships and thereby performed a useful function. This feature is ex-
tended in the law of 1906, which grants an extra bounty of 10 per
cent for ships showing a speed of at least 14 knots on trial trips with
half load, 20 per cent extra for ships with a trial speed of 15 knots,
and 30 per cent extra for ships with a trial speed of 16 knots. On
the other hand, a deduction of 15 per cent from the basic rate is made
in the case of vessels having a speed of less than 10 knots, while ships
of less than 9 knots are excluded from participation in these bounties.
Particular pains were taken in the law of 1906 to see that the equip-
ment bounties were placed where they would do the most good and
to avoid the evil of the law of 1893, which made it profitable for sail-
ing vessels to operate regardless of the amount of cargo carried.
Article 5 of the present law, therefore, requires a minimum average
amount of cargo per voyage. To receive the full equipment bounty
it must be shown that the vessel has, from its departure from a
French port until its return to a French port, carried cargo repre-
senting in freight tons at least one-half of its net register tonnage
during at least one-half of the voyage, the rate of bounty being re-
duced by at least 10 per cent if the vessel fails to meet these require-
ments. No equipment bounty, however, is paid to a vessel whose
cargo tonnage is not equal to at least one-third of its net register ton-
nage during at least one-third of its voyage.
A minimum average daily run between the date of fitting out and
the date of laying up is also required of ships seeking the equipment
bounty provided by the law of 1906. The requirements may be sum-
marized as follows:
Steamships:
14 knots and over.
12 to 14 knots.
11 to 12 knots_.
9 to 11 knots.
Sailing vessels_
Miles.
90
85
65
55
35
85110
In computing the average daily run no account is taken of the
days on which the vessel is stationary from unforeseen causes (force
majeure). For details as to methods of computing distance see de-
cree of September 9, 1902, and for details as to method of computing
cargo see article 5 of decree of August 31, 1906.
The requirements as to amount of cargo and daily run are, in the
opinion of Prof. Ripert, "somewhat complicated, minute, and over-
drawn. There were without doubt, at a certain time, fictitious
voyages, but they are no longer heard of." 1
The procedure followed in recording distance, cargo, tonnage, etc.,
is interesting. Article 15 of the decree of August 31, 1906, requires
that the shipowner must supply the required information regarding
the voyage on a declaration filled out in triplicate. These entries are
transcribed by the administrator of the maritime inscription or the
consul upon a register known as the "registre des traversées," which
is kept on board the vessel. After each voyage the collector of cus-
toms and the administrators of martime inscription enter in this
register the necessary facts as to cargo and voyage. Payment of the
bounty is made by the Ministry of Finance upon written order of the
Ministry of Commerce (art. 19).
1 Ripert: Droit Maritime, Vol. I, p. 157.
154
GOVERNMENT AID TO MERCHANT SHIPPING..
In determining the rates of equipment bounty, the cost of operation
of French ships as compared with ships under the British flag was
the basic factor. The method used is indicated in the following ex-
tract from a British consular report:1
In estimating on the subject of equipment bounties, the shipping of the
United Kingdom was once more made the basis from which the calculations
were derived. It appears that not only are the crews more numerous, but that
they cost more to feed than those on foreign steamships, the cost on a British
steamship per head and per day for each member of the crew (officers included)
being 1 franc 76 centimes ($0.34), whereas on a French steamer it is 2 francs
($0.386), or about 13 per cent higher, while on German steamers it is estimated
at 1 franc 40 centimes ($0.27), and on Italian and Greek steamers 1 franc
($0.193). Moreover, in wages, hospital expenses, insurance, material, etc., the
French ship has more to pay than foreign vessels and consequently an equipment
bounty is necessary to enable the French shipowner to hold his own.
The amounts expended to 1913 in construction bounties under the
law of April 18, 1906, is shown, by years and by class of ships, in
in the following table:
Hull construction.
Wooden ships.
Total
Year. Construc-
Engines, boilers,
etc., and renewa s
of same.
Iron or steel ships.
tion
bounties.
Total.
Under 150 tons
gross.
150 tons gross
and over.
Tons. Bounty. Tons. Bounty. Tons.
Bounty.
Kilos.
Bounty.
1906.. $548, 372
$434, 940
6,504
$37,658
802
$6, 188
19,964
$391,094
1907.. 1,066, 150
3,053,067
901, 430
$113, 432
8, 174
47,330 1,220
9,422
59, 031
844,678
5,451, 181
164, 720
1908.. 2, 148, 281
1,815, 764
8, 919
51,641
2,204
17,016
132, 483
1,747, 107
13,674, 515
1909.. 1,812, 964
332, 517
1,554, 522
10,816
62, 624
2,475
19, 108
56,966
1,472, 790
|
1910.. 1,709, 926
5, 222, 803
258, 442
1,435, 145
10, 213
59, 135
3,133
24, 189
54, 092
1,351, 821
5,754, 337
274, 781
1911.. 2, 114, 399 |
1,743, 172
9,923
57,456
4,511
34,823
68, 538
68, 538
1,650, 893
1912.. 3, 649, 891
8,044, 837
371, 227
3,031, 427
8,428
48,799
6, 260
48,326
125, 556
2,934, 302
1913 2 3, 441, 892
13, 636,387
618, 464
2,839, 029
839, 029
11,324
65, 566
4, 109
31, 725 122, 610
2,741, 738 |10, 134, 035
602, 863
The annual expenditures for equipment or navigation bounties
under the laws of April 18, 1906, and of February 28, 1912, are shown
in the following table:
Year.
Ocean-going ships.
Total
bounty.
Ships in international
coasting trade.
Tons. Bounty.
Tons.
Bounty.
LAW OF APR. 18, 1905.
1906..
$78, 279
44, 253
1907.
$41,665
36,942
253, 392
118,397
1908
165,086
80,536
558, 191
226, 530
$36, 614
88,306
1909..
370, 139
211, 864
783, 332
188, 052
304, 537
1910..
547, 664
198, 478
235,668
1,002, 156
415, 729
702, 300
1911..
257, 665
299, 856
1,170, 604
1912.
464, 769
779,877
301, 772
390, 727
1, 190, 369
19132
534, 371
833, 806
268, 814
1,308, 808
356, 563
433, 685
842, 616
293, 729
466, 192
LAW OF FEB. 28, 1912.
1912.
217,899
269,932
19132
191,722
584, 389
352, 534
566, 977
57,765
60, 699
26, 177
17,412
1 The French Mercantile Law of 1906 and its Predecessors. Report by British Consul
General at Havre. British Diplomatic and Consular Reports, Miscellaneous Series No. 651
(May 4, 1906), p. 10.
• Provisional.
FRANCE, ITALY, SPAIN, AND PORTUGAL.
155
POSTAL SUBVENTIONS.
The régime of postal subventions antedates that of bounty legis
lation and has been continued in spite of subsidies.
Government regulations affecting the transportation of mail by
seagoing vessels may be said to date from a decree of the consuls
of April 9, 1802, which is said to be still in force.¹
Government contracts for regular transportation of mail were
first entered into in 1827, when the attempt was made to secure
regular boats for mail transportation by means of short-term agree-
ments. This arrangement did not prove satisfactory, probably be-
cause of the limited duration of the contracts. In any event, the
State itself undertook the regular transportation of mail in the
Mediterranean under the law of March 24, 1835. This agreement
also proved unsuccessful. In order to cover the annual deficit from
operation, the mail steamers operated by the Government were
obliged to accept freight which was objected to by private ship-
owners.
Thereafter the French Government entrusted the ocean mail serv-
ice to the large steamship lines that had developed. The first agree-
ment providing for the subventioning of mail lines in the Mediter-
ranean was that approved by the law of July 8, 1851. This con-
tract was with the Compagnie des Messageries Nationales, which
has since become the Compagnie des Messageries Maritimes.
At the present time the French Government is bound by a num-
ber of agreements with the most important French steamship com-
panies. The Journal Officiel of July 2, 1914, pages 5801 et seq.
contains a list of agreements between the State and various organi-
zations in France in force on January 1, 1914. Among these are the
following which are listed under the Ministry of the Marine:
Companies.
Compagnie des messageries maritimes.....
Compagnie de navigation Sud-Atlantique...
Compagnie générale transatlantique.
Compagnie de navigation mixte...
Société générale de transports maritimes à
vapeur.
Service.
Date of expira-
tion of contract.
To the Far East; to Australia, New Nov. 30, 1937.
Caledonia, and East Africa; and to
the Eastern Mediterranean.
To Brazil and the River Plate.
To Algeria, Tunis, Tripoli, and Mo-
rocco.
Compagnie marseillaise de navigation à To Corsica.
vapeur Fraissinet et Cie.
Compagnie générale transatlantique..
Compagnie générale transatlantique.
To the West Indies and Central
America.
Between Havre and New York..
July 22, 1937.
(Mar. 11, 1911, with
understanding of
a tacit renewal
for 6 months.
Mar. 27, 1921.
Mar. 31, 1927.
Dec. 31, 1937.
In addition to the above mail contracts are the following under the
control of the Bureau of Posts and Telegraphs of the Ministry of
Commerce, Industry, Posts, and Telegraphs:
Service.
Companies.
Compagnie des chemins de fer du Nord
Between France and England...
Between France and the West Coast
of Africa.
Compagnie des chargeurs réunis.
Date of expira-
tion of contract.
Dec. 31, 1914.
July 25, 1923.
1 Ripert: Droit Maritime, Vol. I, p. 163. The author states that the full text of this
decree is contained in a thesis by Grout on Les Services Maritimes Posteaux en France
(Paris, 1908), p. 16.
156
GOVERNMENT AID TO MERCHANT SHIPPING.
Commenting on the manner in which Government contracts for
the carriage of mail are made, Prof. Ripert makes the following
statement:1
In conformity with the rules followed for Government contracts, these services
are generally open to bids. This method has not always given good results.
Frequently there is only one bidder. On other occasions bids must be thrown
out because of lack of guaranties. The Government has been desirous of making
these agreements by private contract, but the legislature has occasionally pro-
tested against this practice. For example, in 1909 the Chamber of Deputies
refused to approve a proposed agreement with the Compagnie des Messageries
Maritimes and demanded that bids be secured. This procedure did not give a
satisfactory result and it was necessary to arrange for this service by private
contract. (Contract of July 11, 1911.) The decree relative to Government con-
tracts requires competition and publicity (art. 1), but it should be remembered
that article 18 of the decree makes an exception in cases where competition is
not practicable.
The highest bidder as determined by a committee appointed for this purpose
enters into a contract with the State which agreement must be ratified by law.
Regarding the general requirements of the ocean mail contracts it
may be said that the subvention varies not only with the length of
the line and the number of voyages made but also with the speed
maintained. The steamship company undertakes to carry free of
charge at fixed times and according to a fixed itinerary both mail
matter and public funds. It is required also that the steamship
company shall give reduced rates for the transportation of State
officials and for military equipment and supplies. The following
additional conditions are generally stipulated in Government mail
contracts:
1. Ships used in subventioned service must be constructed in
France. The postal subvention serves, therefore, as an indirect
bounty for French shipyards.
2. Ships must be constructed and fitted out in such a manner as to
make them fit for service as auxiliary cruisers in time of war.
Under the law of July 1, 1898, the Government has the power to
requisition mail steamers in such emergencies.
3. Ships must maintain a certain speed.
4. In some cases there is a limit as to the maximum passenger fares
and freight charges that may be imposed (Corsican contract) or an
embargo on the transportation of certain classes of merchandise
(Algerian contract).
5. In the more recent contracts the Government has prescribed
methods of accounting to be used by subventioned lines and has de-
manded participation in the profits above a fixed rate of dividend
for the stockholders.
Compagnie des Messageries Maritimes.-The exacting conditions
of the French ocean mail contracts are well illustrated by the follow-
ing extracts from the contract of the Compagnie des Messageries
Maritimes of December 30, 1911:
ART. 10. Vessels are to be property of concessionary and must have been built
in France.
Construction of new vessels must be so arranged that their average age
six years after these provisions have gone into effect will be less than 12
years.
1 Ripert: Droit Maritime, Vol. I, p. 165.
FRANCE, ITALY, SPAIN, AND PORTUGAL.
157
ART. 13. All equipment must be equal to that of the best French liners.
ART. 15. The administration reserves the right to supervise the construction
of new vessels of the company.
ART. 16. The company is required to communicate to the Minister of Marine
all plans for each new vessel's accommodations that he may make changes
necessary to fit the vessel for war service.
Arts. 17 and 18. A vessel before acceptance must undergo thorough examina-
tion by a special commission.
ART. 21. Fuel supply must consist exclusively of coal of French origin.
ART. 22. Except in case of emergency all changes and extensive repairs to
be made in French workshops.
ART. 23. In case of loss of vessel the company is not allowed to interrupt
service.on plea of force majeure, but may place temporarily in postal service a
vessel not conforming entirely to specifications. A maximum period of two
years is granted for use of such. substitute, after which a vessel fully con-
forming to specifications must be provided.
ART. 24. Strength and personnel of crew shall be fixed by minister on recom-
mendation of Minister of Marine.
ART. 28. The Minister fixes, on the proposal of the company and with regard
to exigencies of the service, the itinerary of vessels. Certain variations there-
from are permitted if it appears that they do not injure the service.
ART. 29. Departure from France may not take place before arrival of dis-
patches from Paris. The delay must not exceed 12 hours without the com-
pany's consent. No indemnity is allowed for the delay.
ART. 57. Reduction shall be made in the fare of officials or bursars, their fami-
lies and domestics, traveling at expense of Government of France or her col-
onies. Reduction, applying to transportation and meals, 25 per cent or 35 per
cent for lower-deck passengers.
ART. 58. The company must reserve a certain proportion of places for Gov-
ernment troops or other Government passengers on vessels preparing for de-
parture, the proportion being reduced after a specified day prior to the vessel's
departure. The proportions and dates vary between the different lines, accord-
ing to detailed regulations.
ART. 63. The company shall transport on requisition, the bodies of soldiers,
sailors, or officials who have died abroad or in the colonies, at 50 per cent of
first-class fare.
ART. 65. Company shall reserve up to 10 days before sailing one-tenth of its
cargo capacity for materials, provisions, and animals destined for use of the
Government or the colonies. After the tenth day prior to sailing the places
not retained by the Government may be sold.
Transportation of material of the Colonial Department is effected on condi-
tions agreed on by that department and the company and approved by the
Minister of Finance. For other departments the rate is 30 per cent less than
the commercial tariff.
An interesting requirement of the present contract with the Com-
pagnie des Messageries Maritimes is contained in article 69, which
provides that the company must accept at any regular port of call
goods presented by a French shipper for any other port of call within
the limits of the space then available. Under these conditions French
shippers must be given a preference. Moreover imported articles
that are reexported must not receive a lower rate on subventioned
vessels than similar goods of domestic origin carried on the same
vessel for the same destination.
The contract of the Compagnie des Messageries Maritimes con-
tained a number of other conditions and a considerable number of
penalties, which may be found in the summary of this contract, which
is presented in Appendix D, pages 242 et seq.
The following table shows for each subventioned service of this
company, the rate of subvention paid per marine league, and the
tonnage and speed of vessels required thereon:
158
GOVERNMENT AID TO MERCHANT SHIPPING.
Tonnage.
Subven-
tion per
marine
league.
Total
gross place-
Dis-
Speed.
Service.
register.
ment..
1 Far East:
1. Marseille-Saigon-Yokohama.
2. Marseille-Saigon-Haiphong.
II. Australia and New Caledonia:
Francs.
32.50
11,000
15,000
Knots.
a 15
Every 2 weeks.
25.50 11,000
15,000
13 Monthly.
3. Colombo-Pondicherry-Calcutta..
20.90 3,000
3,000
12
Every 4 weeks.
1. Marseille-New Caledonia-Australia..
11.60 11,000
15,000
10
H01
Do.
2. Extension to New Hebrides..
46.35
11,000 15,000
Do.
III. East Coast of Africa:
1. Marseille-Majunga - Diego-Tamatave-
Reunion-Mauritius.
17.40
2. Marseille-Diego-Tamatave-Reunion-
17.40
7,500
10,000
7.500 10,000
13
Do.
13
Do.
<<
12.75 7,500 10,000
14
Two every 2
2. Marseille-Alexandria-Port Said-Jaffa-
17.40 7,500
10,000
141
weeks.
Do.
17.40 7,500 10,000
14)
Do.
Mauritius.
IV. Eastern Mediterranean:
1. Marseille Naples - Constantinople
Beirut.
Beirut.
3. Marseille- Alexandria-Port Said-Bei-
rut.
a Between Saigon, Hongkong, Shanghai, and Yokohama minimum speed reduced to 14 knots.
Compagnie Générale Transatlantique.-The Compagnie Générale
Transatlantique receives about the same amount in postal subven-
tions as the Compagnie des Messageries Maritimes. This company
operates three subventioned services, namely, (1) Havre and New
York; (2) Havre, Habana, and Vera Cruz; and (3) a line to Algeria,
Tunis, Tripoli, and Morocco.
The first mail contract of the Compagnie Générale Transatlantique
was entered into on April 24, 1861, and provided for the maintenance
of mail service for a period of 20 years between France and New
York, and France, Cuba, and Mexico. This agreement provided for
a subvention of 3,000,000 francs ($579,000) for 26 voyages yearly
between Havre and New York at a minimum annual average speed
of 11½ knots per hour. The rate of subvention was $10.77 per marine
league, or $3.59 per mile. By a supplementary agreement of Decem-
ber 16, 1873, the number of voyages annually was increased to 40
and the subvention to 3,644,000 francs ($703,292).
The original contract with this company provided for the payment
of 6,300,000 francs ($1,215,900) for a service between St. Nazaire
and Cuba, and a service between Cuba, Cayenne, Vera Cruz, and
Colon. Vessels on the former service were required to maintain an
average speed of 10 knots and on the latter service 8 knots.
A new contract was awarded to this company for the maintenance
of these services for a period of 15 years, commencing July 22, 1886.
This contract called for the maintenance of a weekly service between
Havre and New York with 15-knot boats, and the rate of subvention
was 49.60 francs ($9.57) per mile, making a total annual payment of
5,490,000 francs ($1,057,640). In addition the company was granted
a speed bounty, which amounted to 12 francs ($2.32) per gross ton
for each tenth of a knot above the minimum annual average of 15
knots, with the maximum of 1,200,000 francs ($231,600) per year.
In 1898 a new agreement was entered into between the French
Government and Compagnie Générale Transatlantique providing
for an extension of these services for a period of 10 years, commenc-
ing July 22, 1901. This contract called for the building in France
of four new steamers for the service between Havre and New York.
FRANCE, ITALY, SPAIN, AND PORTUGAL.
159
These steamers were to show a minimum trial speed of 22 knots under
forced draft. The contract provided also that the minimum annual
average speed for all vessels operated by this company should be 17
knots after April 1, 1900; 17.5 knots after July 1, 1900; and 18.3
knots after April 1, 1903. For each tenth of a knot in excess of 19
knots in the annual average speed of its vessels the company was
to receive a speed bounty of 25 francs ($4.83) per gross ton. This
agreement provided in effect for a reduction of the subvention proper
from 5,490,000 francs ($1,057,640) to 5,000,000 francs ($965,000),
and for an increase in the maximum speed bounty from 1,200,000
francs ($231,600) to 1,680,000 francs ($324,240).
The renewal of this contract was the subject of discussion in the
French Parliament for about 10 years. Upon its termination in
July, 1911, it was extended until December 31, 1911; next, to Decem-
ber 31, 1912; then to April 1, 1913; and finally to July 31, 1913, at
which time a new contract covering a period of 25 years was entered
into.
The contract now in force between the French Government and
the Compagnie Générale Transatlantique was signed on November
20, 1912, and went into effect on January 1, 1913, although it was
not ratified by the French Parliament until July 31, 1913. Under
this contract the company is to receive an annual subsidy of 6,000,000
francs ($1,158,000) during the first four years, and a subsidy vary-
ing from 2,500,000 to 7,200,000 francs ($482,500 to $1,389,600) during
the succeeding years. At the end of the fourth year, and of each
year following, the subsidy is to be calculated by taking the average
of the subsidies paid during the four years immediately preceding
and adding, or subtracting, a sum necessary to raise the earnings to
5 per cent of the average capital employed during the same fiscal
years in the services contemplated by the contract. The total amount
of the subsidy shall not exceed 7,200,000 francs ($1,389,600) nor fall
below 2,500,000 francs ($482,500).
In case the company should earn a higher rate of profits in any one
year than the average rate of earnings distributed during the four
fiscal years preceding the signing of the contract, the Government
shall be entitled to one-fourth of any surplus not exceeding 1 per
cent, to one-third of the surplus between 1 and 2 per cent, and one-
half of any surplus in excess of 2 per cent. The Government is en-
titled to receive, at the expiration of the contract, one-half of any
reserves established by the company other than those required by
law. The participation of the Government in the profits and reserves
is limited, however, to the proportion necessary to reimburse the
Treasury for the sums paid to the company in excess of a sum corre-
sponding to an annual subsidy of 6,000,000 francs ($1,158,000).
The contract provides that the company shall maintain a regular
weekly service in both directions between Havre and New York,
without calls at intermediate ports. Ports of call may be established
and the number of voyages increased or diminished by mutual con-
sent of the contracting parties.
The contract runs for 25 years, but the Government may, by giving
six months' notice, extend the contract for a term not exceeding one
The Government agrees not to subsidize competing lines.
The company gives a bond of 1,000,000 francs ($193,000) for the
proper performance of its obligations.
year.
160
GOVERNMENT AID TO MERCHANT SHIPPING.
The company is bound to employ a sufficient number of vessels to
maintain regular service. At the outset the company may maintain
the service by means of the vessels composing its fleet at the time,
but at least four superior vessels are to be placed in commission in
the following intervals: The first in 1916 at the latest, the second
in 1921, the third in 1926, the fourth in 1931. The displacement
of each new vessel under full load must be at least 28,000 metric
tons. The vessels must be built in France, but in case of difficulties
arising from "force majeure" the company may be authorized to
use foreign-built vessels.
With the exception of the oldest vessel, which is to be considered
a reserve vessel, the average age of the total tonnage must not exceed
12 years during the first 22 years or 15 years during the last 3 years
of the term of the contract.
The vessels are required to maintain a minimum speed of 15 to 18
knots from October 1 to March 31 and 16 to 20 knots during the rest
of the year. The average speed of all the vessels must be at least
18.3 knots for the whole year, unless the company is deprived by
"force majeure" of the use of the fastest vessel for more than three
months. Running the vessels at a lower speed subjects the company
to fines calculated in percentages of the subsidy. The speed require-
ments may be increased only by mutual consent.
The company undertakes to carry mails free of charge and to allow
a discount of 30 per cent on the fares of persons traveling at the ex-
pense of the State. In case of war the Government may requisition
the idle vessels of the company on paying a sum equal to 4 per cent
of the estimated value of the vessel, paying for its ordinary deprecia-
tion, and, in case of damage, for its deterioration or loss.
Detailed provisions are made concerning the installation of wireless
telegraph apparatus, equipment, accommodations, safety of passen-
gers, official trial trips, maintenance and repair of vessels, minimum
crews, reports, etc.
The Compagnie Générale Transatlantique, in conjunction with the
Compagnie de Navigation Mixte and the Société Générale de Trans-
ports Maritimes à Vapeur, maintains a subventioned postal service
between France, Algeria, Tunis, Tripoli, and Morocco. The amount
of the subsidy is 1,600,000 francs ($308,800) per year in addition to a
speed bounty not to exceed 400,000 francs ($77,200) per year.
major portion of this service is performed by the Compagnie Générale
Transatlantique, which has been operating under agreements for
period of six months.
It appears from statements contained in the annual report of the
company for the year 1913, that the renewal of this contract has been
the subject of much discussion between the company on the one hand
and the various ministries in France and officials in Algeria and Tunis
on the other. The Government has demanded, among other things,
larger and faster boats, new services, and lower freight rates, without
any substantial increase in the subvention. The company, for its
part, has asked for less exacting conditions or higher subventions.
So far as is known, no agreement for a period of more than six
months has yet been reached.
The attitude of this company toward subventions is indicated by
an extract from its annual report for 1913. In this statement atten-
tion is called to the fact that the ships of the company traveled
FRANCE, ITALY, SPAIN, AND PORTUGAL.
161
3,265,369 miles in 1913, 1,487,876 miles on subventioned services, and
1,777,493 miles on free or commercial services. The statement pro-
ceeds as follows:
We are glad to be able to develop our nonpostal services and thus to avoid the
régime of subventions which, although they have the very appreciable advantage
of providing supplementary revenues have, on the other hand, the handicap
of producing burdens because of the numerous obligations imposed by the State
in return for its financial assistance.
Compagnie Marseillaise de Navigation à Vapeur Fraissinet et
Cie. The only subventioned service now operated by this line is
between Marseille and the island of Corsica. Originally this service
was shared also by the Compagnie Générale Transatlantique under
a provisional arrangement that called for an annual subvention not
to exceed 375,000 francs ($72,375). In 1886 the subvention was re-
duced to 355,000 francs ($68,515).
The Corsican service is now performed by Fraissinet et Cie alone
under a contract which runs to March 27, 1921. This contract calls
for a service between Marseille and Ajaccio with boats having an
average speed of 10 to 14 knots. The annual run is 193,335 miles, for
which a total subvention of 550,000 francs ($106,150) is paid, making
the subvention per mile about 2.85 francs ($0.55).
This company formerly shared with the Compagnie des Chargeurs
Réunis the subventioned services between France and the West Coast
of Africa, which are now wholly in the hands of the latter company.
It is interesting to note that the Compagnie Fraissinet developed
so much traffic on this line that on July 15, 1891, it doubled the
service without any extra subvention and is now operating the entire
service without subvention.
Compagnie des Chargeurs Réunis.-The only subventioned service
operated by this company is the line between Havre and the West
Coast of Africa. The present contract, which runs for a period of
15 years from July 5, 1908, calls for the operation of four boats at an
annual average speed of 12 knots, on a monthly service between Dun-
kirk and Matadi, with a branch line from Matadi to Ogowé and
Fernan Vaz.
A modification of this contract was made late in 1912 providing
for a triweekly, instead of a monthly service, beginning January
1, 1914.
In connection with the line between Dunkirk and Matadi, the
Compagnie des Chargeurs Réunis operates a number of branch lines
to points on the rivers along the West Coast, as, for example, to
Gabon and Grand Bassam and between Kotonou and Porto Novo.
These auxiliary services are important feeders of freight.
Compagnie de Navigation Sud-Atlantique.—A subventioned serv-
ice between France and South America was instituted in May, 1860,
when a contract between the French Government and the Com-
pagnie des Messageries Maritimes went into effect. It will be noted
that this service antedates by a year the Havre-New York service of
the Compagnie Générale Transatlantique.
The original contract was for a period of 20 years, and provided
an annual subvention of 4,700,000 francs ($907,100) for voyages
aggregating 303,696 miles-a rate of about 15.5 francs ($2.99) per
mile. This contract was modified by an agreement under date of
April 22, 1861, which suppressed the line between Marseille and
41987-16-11
162
GOVERNMENT AID TO MERCHANT SHIPPING.
Rio de Janeiro and reduced the subvention to 2,306,172 francs
($445,091). Under the modified agreement the company was obliged
to operate a line from Bordeaux to Rio and from Rio to Buenos
Aires.
This agreement was extended from time to time until July, 1912,
when a new convention was entered into between the French Gov-
ernment and the Société d'Etudes de Navigation, a nominal conces-
sionaire, which ceded its rights to the Compagnie de Navigation Sud-
Atlantique, in which the Compagnie Générale Transatlantique and
the Compagnie des Messageries Maritimes are believed to hold an
interest.
From the annual report of the Compagnie des Messageries Mari-
times for 1911 it appears that the failure of this company to retain a
contract it had held since 1860 was due chiefly to the fact that it
could not meet the speed requirements which were demanded by
the Government and which the Société d'Etudes de Navigation was
prepared to accept.
The present contract runs for a period of 25 years beginning July
22, 1912, and provides for a subventioned postal service. with round
voyages once every two weeks between Bordeaux, Lisbon, Dakar,
Rio de Janeiro, Montevideo, and Buenos Aires.
In addition, the company is required to operate a nonsubventioned
commercial service with voyages at least once a month between Bor-
deaux, Dakar, Pernambuco, Bahia, Rio de Janeiro, Santos, Monte-
video, and Buenos Aires. These boats are required to be of not less
than 4,000 tons cargo capacity and of not less than 11 knots average
speed. Generally they are exempt from the obligations imposed on
the boats of the subventioned line.
As to the vessels to be operated on the subventioned line, the con-
tract provides that they must be built in France and must have a
minimum displacement tonnage of 11,000 tons and a minimum_an-
nual average speed of 15 knots between Bordeaux and Lisbon and 18
knots between Lisbon and Buenos Aires (art. 26). It was provided,
however, that temporarily the company might operate vessels of 9,000
tons displacement at a speed of 14 knots from Buenos Aires to
Lisbon and 15 knots from Lisbon to Buenos Aires, and that two of
the vessels might be of foreign construction (art. 97)
It was also provided that the average age of the boats assigned to
this service should be not more than 12 years at the end of the fif-
teenth year of the contract and not more than 15 years at its ex-
piration.
As to running time, article 27 provides that the time between Lis-
bon and Buenos Aires must not exceed 400 hours (including time
spent in ports of call) at the beginning of the contract and 3301
hours after the new vessels shall have been commissioned.
The subvention paid for this service is as follows:
First 22 months.
Next 14 months.
Balance of contract..
Periods.
Subvention per
marine league.
Subven-
tion per
mile.
Francs.
Dollars.
2856535
4.83
$1.61
30
5.79
1.93
6.76
2.25
FRANCE, ITALY, SPAIN, AND PORTUGAL.
163
The other provisions of this contract are very similar to those of the
Compagnies des Messageries Maritimes contract, which have been re-
ferred to in some detail above at page 156 and in Appendix D.
This contract, like those of the Compagnie Générale Transatlan-
tique and of the Compagnie des Messageries Maritimes, provides that
the State shall participate in the net earnings above 5 per cent paid to
stockholders after allowances for boiler, marine insurance, deprecia-
tion, and emergency reserve funds have been set aside.
Compagnie des Chemins de Fer du Nord.-For many years the fast
channel steamers connecting Calais and Dover have received mail sub-
ventions from the French and British Governments. The French
subvention is paid to the Compagnie des Chemins de Fer du Nord
(Northern Railway Co. of France). Until 1897 the annual subven-
tion paid to this company was 100,000 francs ($19,300). The subven-
tion was increased in 1907 to 250,000 francs ($48,250) and on the
renewal of the contract on July 30, 1907, to 262,500 francs ($50,663).
The following table shows the total amounts expended for postal
subventions for all services in the years 1889 to 1897 and the years
1901 to 1911:
Years.
Postal sub-
vention
Years.
payments.
Postal sub-
vention
payments.
Years.
1889
1890..
1891.
1892
1893.
1894.
+
1895..
$4,918, 605
1896..
$5,053,319
1906..
4,939, 662
1897...
5,053, 319
1907.
Postal sub-
vention
payments.
$4,998,835
5,076, 035
4,939, 662
1901...
5,149,583
1908.
5, 109, 279
4,939, 662
1902..
5,019, 308
1909.
5, 111, 740
5,070, 303
1903..
5,019, 308
1910.
5,319, 727
5,070, 303
1904..
5,053, 319
1905..
5,337, 569
Details as to the expenditures for postal subventions on the several
subsidized services are contained in the following table:
4, 988, 278
4,998,835
1911..
Years.
Mediter-
ranean.
Calais
and
Dover.
New York
and
Indo-
China
Australia
and New
West
and
Indies.
Japan.
Cale-
donia.
East
Coast
of
Africa.
West
Coast
Brazil
of
Africa.
Corsica.
and
Rio de
la Plata.
1900.... $263, 112
$48,665
1901...
263, 112
48, 665
$2,191, 482 $1,184, 248
2,191, 482 1, 184, 248
$604, 989
$374,648
$97,495
604, 989
$250, 900
374, 648
1902...
263, 112
97, 495
48, 665
2,079, 5531, 184, 248
250, 900
604,989
1903..
263, 112
374,648
97,495
48, 665
2,079, 553
1,184, 248
250, 900
1904..
604, 989
374, 638
263, 112
97,495
|
48, 665 2,079, 553
$107, 063
1, 159, 463
629,569
1905..
263, 112
374, 648
97, 495
107, 063
48, 665
2,079, 553
1, 159, 463
629, 569
1906..
374, 648
263, 112
97,495
107, 063
48, 665
2,079, 553
1, 159, 463
629, 569
374, 748
97,495
1907...
263, 112
107, 063
48, 665
2,157, 417
1, 159, 463
629, 569
1908...
374, 648
97,495
263, 112
82, 244
107, 063
2, 157, 417
1, 159, 463
629, 569
1909..
263, 112
374, 648
97, 495
107, 063
84, 677
2,157, 417 1, 159, 463
629, 569
374, 648
1910..
263, 112
97, 495
87, 1102, 157, 417 | 1, 159, 463
107,063
629, 569
1911.
1912a..
263, 112
374, 648
51,780
107, 063
89, 544 2, 157, 4171, 159, 463
250, 900
629,569
263, 112
374, 648
89, 544 2, 157, 417 1, 159, 463
51,780
107, 063
250, 900
629, 569
374, 648
51,780
107,063
268, 634
a In addition $282,257 was paid for a mail line to Algeria, Tunis, Tripoli, and Morocco.
Earnings of steamship companies.-Details from the financial
statements of three of the leading French steamship lines, namely,
the Compagnie Générale Transatlantique, the Société des Chargeurs
Réunis, and the Compagnie des Messageries Maritimes, are shown
for the period from 1909 to 1913, in the following tables:
164
GOVERNMENT AID TO MERCHANT SHIPPING.
COMPAGNIE GÉNÉRALE TRANSATLANTIQUE.
Items.
1
•
1909
1911
1912
1913
Vessels:
Number.
Gross tonnage.
Reduced book value.
Capital..
Bonds.
Reserves:
75
292, 759
$17,489, 179
7,527,000
18, 386, 989
76
329, 442
$19, 790, 247
7,527,000
20, 953, 374
77
344, 738
$25,031,283
7,527,000
23, 541, 928
84
368,345
$25, 715, 087
7,527,000
23, 237, 307
Statutory.
Insurance...
Boiler, etc...
Special.
Operating account:
Receipts, total.
527,743
2, 285, 490
591,068
611, 819
2, 520, 848
2,443, 864
635, 296
2,428, 969
851,590
359, 372
1, 138, 085
1,079, 287
943, 757
196, 147
196, 147
14,899, 593
17,000, 593
18,294, 201
20, 317, 120
Operating revenue.
Miscellaneous.
13, 883, 637
Balance carried forward.
1,015, 956
17, 131, 334
1, 144, 115
Expenditures, total.
Operating expenses.
Administrative expense.…….
Depreciation…….
Net earnings.
Distribution of surplus:
To reserve-
Statutory
Insurance...
Boiler, etc...
Interest.
Dividends.
Rate...
Balance carried forward
12,919,389
10, 627, 613
1,017, 976
1,273, 800
1,980,204
32, 741
168,800
98, 228
1,058, 361
602, 160
15, 889, 853
1, C9S, 883
11,857
14,877, 961
12, 418, 537
1, 185, 624
1,273, 800
1
18,752
16, 386, 723
14, 196, 351
1,225, 978
964, 394
:22, 632
1,907, 478
32,056
160, 700
20, 751
a 76, 984
149, 826
a 58, 798
1, 159, 138
1,473, 702
602, 160
401, 440
8%
18,752
51%
19, 445, 811
859, 725
11,581
18, 363, 117
16,881, 671
1,329, 882
1, 151, 564
1,954,003
8%
19, 914
11,584
23, 478
a 14, 895
a 19, 720
1,472, 866
451, 620
6%
6, 040
• Deficit, due to fact that amounts spent for insurance and repairs exceeded the allotments made in this
year to insurance reserve and boiler reserve, respectively.
COMPAGNIE DES CHARGEURS RÉUNIS.
Items.
1909-10
1910-11
1911-12
1912-13
1913-14
Reduced book value.
Vessels:
Number..
Gross tonnage.
•
Capital.
Bonds.
Reserves:
Statutory.
Insurance.
30
145, 693
$7,862, 253
2, 412.500
3,877, 949
241,250
1,447,500
28
141, 035
$7, 132, 500
2, 412, 500
3, 747, 674
27
132, 213
$6,370, 436
2, 412, 500
3,612, 188
30
144, 999
$6,277, 696
2, 412, 500
3, 471, 298
241, 250
1,546, 951
36
18935
$8, 172, 060
3,618, 750
3, 393, 343
241,250
1, 516, 714
Boiler, etc.
Special.
Operating account:
Receipts, total....
167, 742
404, 028
241, 250
1,447,500
167, 742
241,250
1,447, 500
264, 242
418, 642
41S, 642
212, 300
308, 767
463, 167
463, 167
6, 153, 459
6,324, 083
6,875, 198
7,840, 874
7,962, 495
Operating revenue.
Subventions and subsi-
dies..
6, 109, 710
6, 313, 875
6,868, 326
7,824, 643
Miscellaneous.
7,939, 434
Balance carried forward.
43,749
Expenditures, total..
Operating expenses...
Administrative expense..
Depreciation..
Net earnings..
Distribution of surplus:
To reserves--
Statutory
Boiler, etc.
Special.
Interest
Dividends..
5,887, 455
5, 162, 370
98, 480
626, 605
10,208
5,978, 535
5, 285, 348
100, 008
593, 179
6,872
6, 492, 838
5,852, 194
99, 759
540, 885
16, 231
7,180,506
23,061
7,450, 524
6, 417,067
6,720, 863
103, 881
659, 558
112,590
617, 071
266, 004
345, 548
382,360
660, 368
511, 971
17,552
96, 500
154, 400
63, 802
159,296
154, 400
154, 249
149, 004
143,548
96, 500
Rate.
120, 625
120, 625
Bonus to directors.
4%
168, 875
137,877
253,313
5%
5%
7%
Balance carried forward...
10, 208
6,872
16, 231
16,083
23, 061
7%
24, 125
79, 105
FRANCE, ITALY, SPAIN, AND PORTUGAL.
165
Items.
COMPAGNIE DES MESSAGERIES MARITIMES.
1908-9
1909-10
1910-11
1911-12
1912-13
Vessels:
Number..
65
Gross tonnage..
293, 250
66
296, 924
63
Reduced book value.
$17, 601, 372
Capital...
Bonds..
8, 685,000
12, 868, 372
Reserves:
$17, 167, 626
8,685,000
12, 693, 224
286, 802
$16, 690, 454
8,685,000
12, 511, 901
63
297,149
$20, 108, 172
8,685,000
16,836, 805
60
285, 682
$21,577, 499
8,685,000
21,827, 958
Statutory
Insurance.
868,500
796,490
868,500
780, 737
Boiler, etc.
868,500
799, 989
598, 960
988, 744
Special..
15, 201
1,028, 730
598,960
918, 857
74,003
Operating account:
Receipts, total……….
15,937, 298
16,625, 233
17, 199, 534
16, 197, 771
17, 530, 980
Operating revenue..
12,056, 357
12, 796, 429
Subventions
13,343, 599
2,793, 498
12, 545, 790
2,929, 357
Subsidies..
2,963, 265
2,747, 748
700, 493
588, 358
Miscellaneous...
574, 718
514, 417
313, 681
263, 734
Balance carried forward
278, 170
73, 269
47,355
39, 782
356, 755
33,061
Expenditures, total.
15,039, 586
15,735, 408
16, 218, 023
15,566, 575
Operating expenses.
Administrative expense
11, 223, 266
11,914, 161
2,645, 379
2,692, 848
Depreciation.
Miscellaneous...
Net earnings....
Distribution of surplus:
965,000
965,000
12, 222, 375
2,812, 636
965,000
205, 941
163, 399
218, 012
985, 321
228, 434
11, 590, 433
2,762,387
14, 018, 457
2,532, 721
292, 055
655, 876
31, 871
16,597,585
14, 272, 705
1,427, 374
850, 784
46, 722
897, 712
889, 825
981, 511
631, 196
933, 395
To reserves
Statutory
Insurance.
·
Boiler, etc..
Interest.
Dividends.
7,238
289, 500
289,500
308,800
70, 489
102, 743
102, 743
202, 787
15, 201
452,367
446, 306
15, 581
426, 222
58,803
440, 032
361, 646
196, 891
144, 750
283, 710
Rate..
a 5%
Balance carried forward.
53, 102
51,276
29,893
31,871
á 5%
b2.4%
11,952
a On preferred stock.
› On common stock.
ITALY.
Italy rivals France in the extent to which Government aid has
been granted to the merchant marine, but the results have not, on the
whole, been more successful, although natural conditions have been
and are more favorable to Italy.
Among the natural advantages enjoyed by Italian shipping are
the following: Long seacoast, dense population, efficient maritime
workers, and low wages.
Italy has enjoyed advantages such as these to a far greater extent
than France, but, like France, has been handicapped in one impor-
tant particular, namely, the lack of coal and of a highly developed
iron and steel industry such as would enable the country to manu-
facture cheaply iron and steel vessels. A disadvantage peculiar to
Italy has been the heavy taxation of all industries, including ship-
building and shipping.
In 1870 the merchant marine of Italy was outranked only by the
merchant navies of Great Britain, the United States, France, and
Norway, and, perhaps, Germany. The registered tonnage of Nor-
way and France was only slightly greater and that of Germany
slightly, if any, greater. The comparison with Germany is not
exact, because the statistics for Germany include only vessels of at
least 17.5 tons, while the data for Italy include all vessels of 2 tons
or more. In 1911, on the other hand, the merchant marine of Italy
166
GOVERNMENT AID TO MERCHANT SHIPPING.
was greatly outranked by the merchant navies of all the above-
named countries, and in addition by that of Japan. The following
tabular statement shows the net tonnage of the merchant marine of
each of the specified countries in 1870 and in 1911:
1870
Countries.
1911
Total.
Sail.
Steam.
Total.
Sail.
Steam.
Tons:
United Kingdom.
United States...
Germany a.
•
Japan..
Norway b
France c
Italy c..
Tons.
Tons.
Tons.
Tons.
·
5,690,789
4,577,855
Tons.
112,934
4,246, 507
11,894, 791
902, 718
3, 171, 412
10,992, 073
1,075, 095
7,638, 790
982, 355
2,564, 721
900, 361
81,994
5,074, 069
3,023, 725
510, 059
2, 513, 666
1,787, 624
412,541
1,022, 515
1,008,800
1,375, 083
1,072, 048
13, 715
1,646, 030
738, 197
917, 633
154, 415
987, 832
1,012, 164
1, 462, 639
624, 521
980, 064
32, 100
838, 118
1,107,985
410,991
696, 994
:
a Includes vessels of 17.5 tons and upward.
b Includes vessels of 4 tons and upward.
c Includes vessels of 2 tons and upward.
The progress made by the Italian merchant marine, measured in
actual register tons, has been comparatively slight. The total ton-
nage (including craft of 2 tons and upward) registered under the
Italian flag at the close of 1913 was only 1,232,848 net tons as com-
pared with 1,012,164 net tons in 1870.. It should be noted, however,
that along with the world-wide decline in the use of sailing vessels
the total tonnage of the Italian merchant marine decreased to such an
extent that in 1890 it was nearly 20 per cent lower than in 1870.
During that period the steam tonnage increased rapidly. Since 1890
there has been a steady increase in steam tonnage, and sail tonnage
has continued to decline. Since steam tonnage is generally regarded
as having an effectiveness at least three times that of sail tonnage, it ·
will be seen that the potential tonnage has increased in a considerable
degree.
The development of the Italian merchant marine in the period from
1870 to 1913 is indicated in the following table,¹ which shows the
actual and potential net tonnage:
1870.
1875..
· 1880..
1885.
1890..
1895.
1900...
1905..
1906..
1907..
1908..
: 1909..
· 1910..
1911.
1912.
1913..
Years.2
Actual net tonnage.3
Total.
Sail.
Steam.
Potential
net
tonnage.4
1,012, 164
980, 064
32, 100
1,044, 337
987, 190
57, 147
999, 196
1,076, 364
1, 158, 631
922, 146
77,050
953, 419
1, 153, 296
828, 819
124, 600
820, 716
1, 202, 619
634, 149
186, 567
776, 077
1, 193, 350
555, 569
220, 508
1,217, 093
945, 008
568, 164
376, 844
1,025, 603
1,698, 696
541, 171
484, 432
1,000, 797
1,994, 467
503, 260
497,537
995, 260
1,995, 871
468, 674
526, 586
1,020, 062
2,048, 432
453, 324
566, 738
2, 153, 538
1,071, 193
439, 941
1, 107, 187
432, 690
1, 107, 985
410, 991
631,252
674, 497
696, 994
2, 333, 697
2,456, 181
1, 137, 109
374,835
1, 232, 848
355, 963
762,274
876, 885
¹ Relazione sulle Condizioni della Marina Mercantile Italiano al 31 dicembre, 1913, p. 109.
On Dec. 31.
$ Includes vessels of 2 tons and over.
4 Computed on the theory that 1 ton of steam tonnage equals 3 tons of sail tonnage.
2, 501, 973
2,661, 657
2, 986, 618
FRANCE, ITALY, SPAIN, AND PORTUGAL.
167
According to some writers on the subject, Government aid was
extended to shipping in the Kingdom of Naples as early as 1816,
and the marked development of the merchant marine of that King-
dom in the early part of the nineteenth century has been attributed
to the discriminating duties and bounties it enjoyed. It is true that
the merchant marine of the kingdom of Naples flourished, but its
prosperous condition is ascribed by competent authorities to the
abundance of cheap labor for building and operating the wooden
sailing ships of that period, attention being called to the fact that
at that time all maritime countries had similar discriminating duties
and that the merchant shipping of Naples did not have any ad-
vantage therein.
INDIRECT AID.
Reservation of coasting trade.-The coasting trade of Italy has
long been reserved for ships flying the Italian flag. In view of the
extent of the seacoast of Italy and the many populous cities located
thereon, the coasting trade is important, and its monopolization is
therefore a valuable privilege.
Exemption from import duties.-Under the customs tariff now in
force free admission is granted to all foreign-built vessels imported
for use in navigation on lakes and rivers, as well as vessels for ocean
navigation, including dredges and decked tugs. A duty of 17.5 lire
($3.38) per gross ton is levied on the hulls of foreign-built tugs
without decks, if built of wood, and 37.5 lire ($7.24) per gross ton,
if built of iron or steel, in addition to a duty of 12.9 lire ($2.49)
per indicated horsepower on the engines, $9.5 lire ($18.34) per 100
kilos on the boilers, and 11 lire ($2.12) per 100 kilos on the auxiliary
apparatus.
Under a drawback regulation issued January 28, 1914, temporary
free importation was granted to "naval equipments, machines, boil-
ers, and auxiliary apparatus, or their parts, on board of ships an-
chored in the harbor, which are intended to be repaired."
Preferential railway rates.-No preferential railroad rates on goods
for export on ships flying the Italian flag are granted by the Italian
railways, all of which are owned by the State. As far back as 1897,
the British Minister at Rome reported as follows:¹
I am
With regard to the question of preferential railway rates,
told that such a system is quite unknown here, and that the meaning of
preferential railway rates" is not clearly understood.
Refund of canal dues.-The Societa Nazionale di Servizi Maritimi
receives a refund of the Corinth Canal dues paid by its ships, in re-
turn for a reduction in freight rates on wine, oil, cheese, and cattle
exported from Sardinia, for a reduction of rates on the through
rail-and-water service between the mainland and Sardinia, and for
free carriage of mails. The sums refunded on this account in recent
years are as follows: 1910-11, 196,965 lire ($38,014); 1911-12, 182,671
lire ($35,256); 1912–13, 191,393 lire ($36,746).
1 Commercial No. 2 (1898), p. 95.
168
GOVERNMENT AID TO MERCHANT SHIPPING.
DIRECT AID.
BOUNTIES OR SUBSIDIES.
LAW OF JUNE 14, 1866.
Subsidy legislation in Italy really dates from the law of 1866,
which granted a bounty on the construction of wooden merchant
ships and also on war vessels. The total amount paid under this
law was, however, comparatively small. The bulk of the merchant
tonnage of the world then consisted of wooden sailing vessels and as
long as this condition continued the shipbuilding and shipping indus-
tries of Italy prospered. With the substitution of iron and steel for
wood the shipbuilding industry of Italy was at a disadvantage.
The law of 1866 continued in force until the passage of the law
of July 13, 1911, although its more important provisions had been
abrogated in the law of 1885.
LAW OF DECEMBER 6, 1885.
The law of December 6, 1885, was based upon the investigations
and recommendations of a parliamentary commission appointed in
1881 to study the shipping situation in Italy. This law resembled the
French law of January 29, 1881, and provided for three classes of
bounties: On construction and repair of merchant ships, on naviga-
tion in general, and on the transportation of coal. The operation of
this law was limited to a period of 10 years.
Construction and repair bounties.-The following tabular state-
ment contains a list of the construction and repair bounties provided
in the law of 1885:
Wooden hulls..
Iron or steel hulls..
Floating material.
Engines (new)…….
Boilers (new)...
Repairs:
Engines.
Boilers.
Items.
Rate of bounty.
Unit of payment.
Lire.
Dollars.
Gross tons.
15
2.90
..do...
60
11.58
...do...
30
5.79
Horsepower.
10
1.93
100 kilos..
6
1.16
.do...
.do...
11
2.12
6
1.16
Construction bounties were paid on vessels purchased abroad as
well as on those constructed in Italy, but the former privilege of free
entry of foreign shipbuilding materials was abolished. It will be
noted that a construction bounty was paid on floating material (gal-
leggianti) as well as on vessels. By "floating material" was meant
all craft and structures, including docks, scows, etc., not subject to
registration.
Bounties on marine engines and boilers were increased 10 to 20
per cent in the case of vessels that were convertible into war cruisers
and had a speed of 14 knots and a sufficient bunker capacity to steam
4,000 miles at the rate of 10 knots an hour.
FRANCE, ITALY, SPAIN, AND PORTUGAL.
169
The construction bounties provided in the law of December 6, 1885,
were increased by royal decree of March 22, 1888, as a result of the
tariff act of July 14, 1887, which increased the import duties on
shipbuilding materials and provided a special bounty on the con-
struction of war vessels, thereby reestablishing the system instituted
by the law of 1866 and discontinued by the law of 1885.
The bounties granted in the decree were as follows:
Merchant ships:
Hulls-
Wooden.
Iron or steel.
Floating material.
Engines (new).
Boilers (new).
Repairs:
Engines.
Boilers.
Warships:
Vessels...
Small craft.
Engines..
Boilers.
Auxiliary equipment.
Items.
Rate of bounty.
Unit of payment.
Lire.
Dollars.
Gross ton..
17.5
3.38
.do...
77.0
14.86
...do...
37.5
7.24
Horsepower.
12.5
2.41
100 .ilos...
9.5
1.83
do...
9.5
1.83
do...
11.0
2.12
Gross ton...
50.0
9.65
.do....
37.5
7.24
Horsepower.
8.5
1.64
100 ilos...
do....
9.5
1.83
11.0
2. 12
.
Navigation bounties.-The navigation bounty of the law of 1885
was granted to Italian vessels, including foreign-built as well as
Italian-built craft, at the rate of 65 centimes (12.5 cents) per gross ton
per 1,000 miles run on voyages between ports on the Mediterranean
(including also ports on the Sea of Marmora, the Black Sea, the
Sea of Azof, and the Danube) and ports beyond the Suez Canal or
the Straits of Gibraltar, and on voyages between one continent and
its adjacent islands and any other continent and the islands belong-
ing to it, provided such voyages did not lie wholly within the Medi-
terranean Sea.
The following classes of vessels were expressly excluded from par-
ticipation in this bounty: Vessels not registered in the first class of
approved classification societies; steamers receiving mail subventions;
pleasure boats; sailing vessels more than 15 years old; and steam-
ships more than 10 years old. Steamships receiving this bounty could
not be sold or chartered to foreign Governments or companies with-
out the consent of the Italian Government.
Coal transportation bounty.-This bounty amounted to 1 lire
($0.193) per ton on coal imported in Italian vessels from points be-
yond Gibraltar, provided the quantity of coal carried was equal to
at least three-fifths of the vessel's carrying capacity.
Result of law. The law of 1885 was not on the whole successful.
During the 10 years it was in force the total tonnage of the Italian
merchant marine continued to decline. The tonnage of sailing ves-
sels declined from 828,819 net tons to 555,569 net tons, while the
steam tonnage increased only from 124,600 tons to 220,508 tons.
Dr. Meeker calls attention to the fact that after the passage of
this law the number of new vessels constructed in Italy was consid-
170
GOVERNMENT AID TO MERCHANT SHIPPING.
·
erable, but the increase in tonnage was slight. This was due, he
states, to the construction of many small iron and steel ships for the
coasting trade. Dr. Meeker points out¹ also that in return for an
expenditure of 6,396,419 lire ($1,234,508.87) in construction bounties
the value of Italian construction increased only 6,472,954 lire ($1,-
249,280.12) in the period 1886-1892, as compared with the period
1879-1885. On the other hand, he lays. stress on the fact that the
bounties on construction conferred no greater benefit than the free
entry of shipbuilding materials given before 1887 and 1888, so that
the shipbuilding industry enjoyed no greater protection under the
direct bounty than under the indirect bounty that existed from 1878
to 1886.
LAW OF JULY 23, 1896.
The law of December 6, 1885, which was passed for a period of
10 years, was extended by the law of December 26, 1895, to June 30,
1896, and was superseded by the law of July 23, 1896. The new law
was very similar to the law of December 6, 1885, as amended by royal
decree of March 22, 1888.
The law of July 23, 1896, was enacted for a period of 10 years, but
it continued in force with various modifications until July 1, 1911,
when the law of July 13, 1911, which is now in force, took effect.
Construction bounties.-The rate of bounty on hulls built in Italian
yards was left at 77 lire ($14.86) per ton of gross measurement for
hulls of iron or steel and at 17.5 lire ($3.38) for vessels with wooden
hulls.
No bounty was granted, however, for the constructon of warships
ordered by foreign Governments, but customs duties paid on materi-
als used in the construction of such vessels were refunded. In the
case of warships for the Italian Government, the amount of customs
duties on the various materials used therein was to be taken into
account in fixing the prices of the ships.
The new law provided for the payment of a construction bounty
only on merchant ships built in Italy that had a first-class rating
from the Registro Nazionale Italiano or other approved classifica-
tion society.
Attention is called to the fact that the benefits of this law were
limited to merchant vessels engaged exclusively in navigation on
seas, lakes, and rivers, both domestic and foreign (arts. 1 and 2),
and did not extend, as under the former law, to all floating mate-
rial. To make this restriction more explicit, article 8 provided that
bounties paid on hulls and boilers should be refunded to the Govern-
ment if the vessels receiving such bounties should be devoted to in-
ternal service of harbors and coasts within five years from the date
of their launching.
Vessels with framework wholly of iron, but with covering of wood,
were barred from participation in this bounty.
The rate of bounty was to be reduced by 10 per cent if more than
one-fourth of the materials used in the construction of iron or steel
hulls were of foreign production, while a reduction of 15 per cent
was to be made if the engines and boilers were of foreign manufac-
ture.
1 Meeker: History of Shipping Subsidies, p. 101.
FRANCE, ITALY, SPAIN, AND PORTUGAL.
171
•
Bounties on engines and boilers were also granted under the new
law and were fixed at the same rates, namely, 12.5 lire ($2.41) per
unit of indicated horsepower on marine engines constructed in Italy,
9.5 lire ($1.83) per 100 kilos on boilers of Italian construction, and
11 lire ($2.12) per 100 kilos on auxiliary marine apparatus made in
Italy. The law provided that this bounty should be paid directly
to the shipbuilder if no stipulation to the contrary was made by the
person ordering the ships.
Mention has been made of the fact that during the operation of
this law all exemptions from customs duties on materials used in the
construction of war vessels were eliminated. This measure did not,
however, result in any practical change; since, as noted above, the
amount of duties actually paid was taken into account in fixing the
prices of vessels for the Italian Government, while in the case of
materials used in the construction of men-of-war built for foreign
Governments drawbacks were allowed.
An important section of this law is contained in article 10, which
provided that if during the operation of the law any change should
be made in the customs duties on materials used in the construction
of warships, the Government should have the power to modify the
bounties by raising or reducing them in proportion to the change in
duties.
Navigation bounties.--The law of 1896 increased the rate of navi-
gation bounties from 65 centimes (12.5 cents) to 80 centimes (15.4
cents) per gross ton per 1,000 sea miles.
Following the precedent set by the French subsidy law of January
30, 1893, this law provided a sliding scale of navigation bounties, the
rate decreasing every three years by 10 centimes (1.93 cents) per
gross ton per 1,000 miles for steamers and by 15 centimes (2.90 cents)
for sailing vessels. The bounty for sailing vessels was not, however,
to be reduced below 20 centimes (3.86) cents per gross ton.
The basic rate of 80 centimes (15.4 cents) per gross ton per 1,000
miles was to be granted only to Italian steamships and sailing vessels
operating between ports entirely beyond the Suez Canal or the Straits
of Gibraltar or between ports on the Mediterranean (including also
ports on the Sea of Marmora, the Black Sea, the Sea of Azof, and the
Danube River) and ports beyond the Suez Canal or the Straits of
Gibraltar.
Only two-thirds of the basic bounty rate was paid to steamships
and sailing vessels operating between ports other than Italian ports,
in the Mediterranean (including also ports on the Sea of Marmora,
the Black Sea, the Sea of Azof, and the Danube River). Two-thirds
of the basic bounty rate was paid to steamships but not to sailing
vessels operating exclusively between ports of Italy.
Another innovation in the law of 1896 was a provision that the
Government might increase the basic bounty rate by 50 per cent in
the case of Italian-built steamships having an average speed of 16
miles an hour with full cargo during a voyage of 12 hours (art. 12).
Vessels receiving postal subventions, as well as pleasure boats, were
expressly excluded from participation in the navigation bounties.
(art. 15).
A requirement as to size of vessel was also introduced in this law.
To receive navigation bounties steamships operating on routes beyond
.172
GOVERNMENT AID TO MERCHANT SHIPPING.
the Mediterranean were to be of not less than 500 tons gross, while
sailing vessels were to have a tonnage of at least 250 tons if built of
iron or steel and 100 tons if of wood. For boats operating within the
Mediterranean the requirement was that they should be of not less
than 100 tons gross measurement (art. 14).
The age limit of steamships entitled to this bounty was increased
from 10 years to 15 years, and of sailing vessels from 15 years to 21
years (art. 14).
Steamships receiving navigation bounties were bound to carry
free of charge the Italian mails (art. 18) and the Italian Govern-
ment was given the power to requisition any subsidized vessel in case
of war, epidemic, or other extraordinary circumstances (art. 17).
The following classes of vessels were admitted to the benefits of
the navigation bounties (art. 13): (a) Italian-built vessels registered
at the time of the passage of the act or during 10 years thereafter;
(b) Italian-built vessels under construction at the termination of the
law, provided they were registered within two years thereafter; (c)
foreign-built vessels registered before January 1, 1887.
Results of law.-The results of the second principal law on sub-
sidies for the Italian merchant marine were not more successful than
those produced by the first law. The failure of both laws is due to
practically the same causes. Dr. Meeker calls attention to the fact
that burdens placed upon the Italian merchant marine in the form of
harbor dues and taxes (not including taxes on shipbuilding plants)
exceeded the amount paid in bounties of all kinds and in drawbacks.
In this connection he states that the system "then in its entirety is not
really a bounty system at all, but a tax system."
"1
Further causes for the failure of the law of 1896 are given in a
report of the American consul general at Rome, under date of July
25, 1899: 2
In view of the efforts of the Government to encourage Italian shipping, the
long seaboard, and the necessity of shipping to the economic life of the country,
the results are certainly far from satisfactory, and it is particularly remark-
able that the tonnage of Italian steamers remains generally so low, while in
other countries the tendency has been towards the employment of large ships,
as more economical in working. It is sometimes asserted that taxation on
the shipping industry is so heavy as to kill small enterprise, which, if unfet-
tered, might grow and flourish; but, on the other hand, the Government can
point to the large navigation subsidies, which for the past year are estimated
to exceed 3,000,000 lire ($579,000). A further, and perhaps more correct ex-
plantation of the unsatisfactory situation is that the bulk of the subsidies are
paid to two or three companies, which by constant favor have established a sort
of shipping monopoly and successfully use their influence to crush all possible
rivals.
ROYAL DECREES OF JUNE 17, 1900, AND NOVEMBER 16, 1900.
The law of 1896 proved to be so unsatisfactory that it was found
necessary to modify it in certain particulars. This was accom-
plished by royal decrees of June 17, 1900, and November 16, 1900.
The latter made several important changes.
Construction bounties.-In the matter of construction bounties,
instead of a flat bounty of 77 lire ($14.83) per gross ton for all iron
or steel vessels, a rate of 45 lire ($8.69) per gross ton was given for
¹ Meeker: History of Subsidies, pp. 103-104.
2 Special Consular Reports, vol. 18 (1900), p. 72.
FRANCE, ITALY, SPAIN, AND PORTUGAL..
173
iron or steel steamships with a speed below 12 knots and for all iron
or steel sailing vessels. This rate was increased to 50 lire ($9.65)
per gross ton for steamships with a speed of 12 to 15 knots and
to 55 lire ($10.62) for steamers with a speed of more than 15 knots.
Instead of a flat rate of 17.5 lire ($3.38) per gross ton for vessels
with wooden hulls, a rate of 13 lire ($2.51) per net ton was granted.
No construction bounty on vessels built for foreigners was pro-
vided for in the royal decree of November 16, 1900. Customs draw-
backs were expressly abrogated and a bounty of 5 lire ($0.965) per
100 kilos of metal used in repairs was substituted.
Navigation bounties.-The navigation bounties of the law of 1896
were modified by the royal decree of November 16, 1900, in the fol-
lowing particulars:
First. All foreign-built vessels were excluded from the benefits of
the bounty.
Second. The rates were greatly reduced. Instead of a basic rate
of 80 centimes (15.4 cents) per gross ton per thousand miles payable
to both steamships and sailing vessels, a rate of 40 centimes (7.72
cents) was granted to steamships and only 20 centimes (3.86 cents)
to sailing vessels.
Third. Limits were placed on the amount of bounties that could
be earned in a year. Bounties were to be paid on not more than
40,000 miles in the case of a steamer of 12 to 15 knots and on not
more than 50,000 miles for a steamer above 15 knots. The maximum
for sailing vessels was fixed at 10,000 miles.
Fourth. Limits of tonnage and credits for the construction and
navigation bounties were stipulated. Bounties on steamships could
not be granted for more than 20,000 tons gross in the period between
November 16, 1900, and June 30, 1902, nor more than 20,000 tons
during the fiscal year 1902-3, and not more than 40,000 tons in any
year thereafter during the operation of the law of July 23, 1896. In
this way the total amount of new steamship tonnage entitled to the
bounties of this law was fixed at 200,000 gross tons, and the maxi-
mum annual expenditure at 10,000,000 lire ($1,930,000).
LAW OF MAY 16, 1901.
The royal decree of November 16, 1900, was not long in force. It
was superseded by the law of May 16, 1901, which took effect in a
number of its provisions from January 1, 1901. The new law bor-
rowed many of the provisions of the decree of November 16, 1900, but
completely abrogated the royal decree of June 17, 1900, and greatly
modified the principal features of the law of July 23, 1896.
Construction bounties. For ships which had been the object of a
bounty declaration on or before September 30, 1899, the construction
bounty was left as in the law of July 23, 1896 (art. 2).
In the case of domestic-built vessels declared after September 30,
1899, construction bounties were granted to steamships with a gross
tonnage of at least 400 tons and to sailing vessels of at least 100 tons.
This bounty was, however, limited to a single payment, which was
made when the ship was completely fitted out. It was, moreover,
paid only for ships launched between May 16, 1901, and June 30,
174
GOVERNMENT AID TO MERCHANT SHIPPING.
1907. The rates of payments (art. 8) made under this bounty are
shown in the following tabular statement:
Class of ship and date of launching.
Bounty per gross
ton.
Lire.
Dollars.
Iron or steel sailing vessels and steamships launched:
May 16, 1901, to June 30, 1903..
July 1, 1903, to June 29, 1905.
July 1, 1905, to June 30, 1907.
Wooden sailing vessels launched:
May 16, 1901, to June 30, 1903…….
July 1, 1903, to June 30, 1905.
July 1, 1905, to June 30, 1907…….
899 829
60
11.58
50
9.65
40
7.72
30
5.79
20
3.86
10
1.93
In addition, domestic-built ships declared after September 30,
1899, were granted an allowance in the nature of a compensation for
customs duties on shipbuilding materials. This allowance was 35
lire ($6.76) per gross ton for hulls of iron or steel and 13 lire ($2.51)
for hulls of wood (art. 2). Moreover, the constructors of ships built
after September 30, 1899, were granted the privilege of importing
free of charge one-third of the metals necessary for the construction
of the hull, but not in excess of 160 kilos per gross register ton
(art. 6).
The allowances made as compensation for customs duties were re-
duced by 10 per cent if more than one-third of the materials used in
the construction of the hulls were of foreign manufacture. At the
same time it was provided that if there should be any modification
in the customs duties on materials employed in shipbuilding, the
bounties granted as compensation for customs duties should be modi-
fied accordingly (art. 2).
No construction bounty was to be paid on any merchant vessel con-
structed for foreign account, but imported materials used in con-
structing them were to be admitted free of charge temperarily. The
same procedure was followed in the case of foreign materials used
in the construction of warships for foreign governments (instead of
giving drawbacks as provided by art. 2 of the law of July 23, 1896),
and also in the case of new boilers and engines of foreign manufac-
ture placed upon warships, as well as for materials used in the con-
struction of iron or steel lighters for export. A limit was placed,
however, on foreign materials that could be imported free of charge,
the amount being fixed at 40 lires ($7.72) per gross ton (art. 7).
The construction bounties on engines, boilers, and auxiliary appa-
ratus were not modified by the law of May 16, 1901.
Navigation bounties.-Navigation bounties were slightly changed.
The rate for steamships was fixed at 45 centimes (8.59 cents) per gross
ton per thousand miles, and for sailing vessels at 13 centimes (2.5
cents). These payments were to be made on steamships until 15 years
had elapsed from the date of their construction and on sailing vessels
until their thirtieth year of operation, without regard to the time.
limit of the law of 1896.
Ships of foreign construction were expressly excluded from the
benefits of the navigation bounty and the provision of the law of
FRANCE, ITALY, SPAIN, AND PORTUGAL.
175
July 23, 1896, reducing by one-third the navigation bounties on voy-
ages within the Mediterranean (see p. 171) was suppressed.
The total mileage on which navigation bounties could be paid was
fixed at 30,000 miles in the case of steamships and at 12,000 miles for
sailing vessels. In other words, no navigation bounty was paid above
these limits. An interesting provision in this connection was that
the entire navigation bounty for the year should be divided between
vessels in proportion to their gross tonnage and the number of miles
actually run during the year.
An interesting provision introduced for the first time in the sub-
sidy laws of Italy was to the effect that the right to the navigation
bounty should be forfeited if the company requesting the same
should be guilty of entering, directly or indirectly, into an agree-
ment to increase, in an artificial manner, freight rates and passenger
fares to or from Italian ports.
The total amount payable in bounties under this law was limited
to 8,000,000 lire ($1,544,000) a year (instead of 10,000,000 lire
($1,930,000) as provided in decree of Nov. 16, 1900) for the fiscal
years 1901-2 to 1905-6. The steam tonnage declared after Septem-
ber 30, 1899, that was entitled to the bounty could not exceed 40,000
tons in any fiscal year until the expiration of the law of July 23,
1896.
The order of priority for construction bounty was to be determined
according to the time when the ship was purchased and ready to put
to sea. The order of priority for the repair and navigation bounties
was fixed according to the date on which all the documents required
for liquidation were presented. No restriction, however, was placed
on the amount of tonnage that might earn these bounties in any year
within this limit.
LAW OF JUNE 28, 1906.
This law extended, with a few modifications, the operation of the
laws of July 23, 1896, and of May 16, 1901, to June 30, 1908.
The modifications made by this law were comparatively slight. It
will be remembered that the law of May 16, 1901, introduced a new
form of construction bounty, which consisted of a lump-sum payment
on ships declared after September 30, 1899, and launched before
July 1, 1907, the rate of bounty decreasing every two years. The
law of June 28, 1906, extended this provision so that ships launched
between July 1, 1907, and June 30, 1908, could receive the bounty
granted under the law of May 16, 1901, to ships launched between
July 1, 1905, and June 30, 1907.
The law of June 28, 1906, introduced a new feature in the matter
of navigation bounties. It provided that the balances of the credits
for the fiscal years 1905-6 and 1906-7 must be used exclusively for
the payment of subsidies to steamships declared since September
30, 1899, maintaining an average speed of 151 knots per hour on a
trial trip with full load for 12 hours. This provision apparently
made it possible for the expenditure for bounties of all kinds to
exceed in at least two fiscal years the maximum limit of 8,000,000
lire ($1,544,000).
176
GOVERNMENT AID TO MERCHANT SHIPPING.
The balances of the credit voted for the fiscal year 1907-8 were to
be turned back into the Treasury without any deduction for customs
drawbacks on construction and repair materials on which the pay-
ment of duty had not been made before June 30, 1908.
The new law also reenacted the provision of the earlier law limit-
ing the annual expenditure for bounties of all kinds to 8,000,000 lire
($1,544,000).
LAWS OF JUNE 16, 1907, AND JUNE 13, 1910.
The primary object of these laws was to extend until June 30, 1910,
and June 30, 1911, the operation of the subsidy laws then in existence.
They are referred to merely for the sake of completeness and to in-
dicate the indefinite character, so far as period of operation is con-
cerned, of much of the legislation of Italy on subsidies.
LAW OF JULY 13, 1911.
This law has been in force since July 1, 1911, and may be regarded
as the third principal subsidy law in Italy, the others being the
laws of December 6, 1885, and of July 23, 1896. It will be remem-
bered that the law of July 23, 1896, was modified in a few particulars
by Royal Decrees of June 17, 1900, and November 16, 1900, and by
the laws of May 16, 1901, June 28, 1906, June 16, 1907, and June 13,
1910. Prior to the passage of the present law it was difficult to
describe the subsidy system of Italy without taking into account
not only the basic law of July 23, 1896, but also all of the qualifying
laws and decrees above mentioned.
The present law was enacted for a period of 15 years and pro-
vides for three principal types of bounties, two on construction and
repairs, and one on navigation.
"Construction bounties.-Under this law construction bounties
(compensi di costruzione) are paid on merchant vessels, dredges
(draghe), and bridged tugs (rimorchiatori pontati), built in Italian
yards and navigating seas, lakes, lagoons, and rivers. Vessels of
iron or steel hulls, launched during the first five years of the opera-
tion of the law receive a bounty of 55 lire ($10.62) per gross ton;
those launched during the second five-year period, 50 lire ($9.65)
per gross ton; and those launched during the last five years of the
operation of the law, 45 lire ($8.69). Wooden sailing vessels receive
a bounty of 10 lire ($1.93) per gross ton (art. 4).
In addition to the construction bounty, a bounty or allowance for
duties on imported materials (compenso daziario) is granted by the
present law. This allowance amounts to 35 lire ($6.76) per gross
ton for vessels of iron or steel and to 15 lire ($2.90) for vessels of
wood (art. 2).
Shipbuilders have, in addition, the privilege of importing free
of duty one-fourth of the metallic materials necessary for the con-
struction of the hull, but this quarter may not exceed 120 kilos per
gross register tón.
The allowance for duties is reduced 10 per cent if the quantity
of foreign material used in the construction of the hull exceeds in
FRANCE, ITALY, SPAIN, AND PORTUGAL.
177
weight one-fourth of the total material, irrespective of whether or
not payment of duty exceeds that proportion. At the same time pro-
vision is made for the change of the allowance in case any changes
are made in the tariffs.
Bounties on construction and allowances in compensation for duties
are not granted to the following classes of vessels (art. 6):
1. Vessels with framework of iron or steel and outside covering
of wood.
2. Ships used by State administrative officials, except those used
for navigation in the Straits of Messina and those used in the service
of the State railway administration.
3. Pleasure craft.
4. Tugs without decks.
5. Vessels of iron, steel, or wood used exclusively for navigation
within ports. roadsteads, lakes, lagoons, on rivers, or used as tugs,
dredges, scows, or ferryboats.
Bounties on engines, boilers, and auxiliary apparatus are also
granted by the law of 1911. A grant of 15 lire ($2.90) per indi-
cated horsepower is made for steam engines and auxiliary apparatus
forming an integral part of the vessel; 17 lire ($3.28) per shaft for
the installation of turbine machinery; 27 lire ($5.21) per horsepower
for internal-combustion engines and apparatus and accessories con-
nected therewith; 12 lire ($2.32) for boilers and auxiliary appa-
ratus considered as accessories of boilers; and 13.5 lire ($2.61) per
100 kilos for all other auxiliary apparatus. These bounties are not,
however, paid on engines, boilers, and auxiliary apparatus installed
on vessels excluded from the bounties on construction and allowances
for duties (art. 8).
The law also provides for the temporary admission free of duty of
the following materials:
1. Foreign metallic materials, used in the construction of the hulls,
engines, boilers, and auxiliary apparatus of merchant or war vessels
or floating materials (galleggianti) of iron or steel built for foreign
account.
2. Articles of equipment or fitting-out for vessels mentioned
under 1.
3. Engines or boilers and also parts of engines and boilers used in
the construction of vessels mentioned under 1.
4. Metallic materials, engines, boilers, or parts of engines and
boilers of foreign construction used in the repair or alteration in
Italy of war or other vessels belonging to foreign governments.
The free entry of materials specified in the preceding paragraph
may not exceed, in the case of merchant ships of iron or steel, 40 lire
($7.72) per gross register ton (art. 10).
Italian shipbuilders may claim the privilege of temporary free
admission of foreign materials used in vessels ordered by Italians,
but only if they renounce the other customs and construction bounties
granted by the law (art. 10).
In the case of warships built in domestic yards for the Italian
Government, the law of July 13, 1911, provides that in fixing the
prices of such ships account shall be taken of the amount of duties
on foreign materials used in the construction thereof (art. 11).
41987-16- -12
178
GOVERNMENT AID TO MERCHANT SHIPPING.
This law continued in force the bounty on repairs established by
royal decree of November 16, 1900. Strictly speaking, this bounty
amounts to a lump-sum allowance for duties on imported raw mate-
rials used in ship repairs. This payment is 5 lire ($0.965) per 100
kilograms of metallic materials used in repairs made in Italian ship-
yards on hulls, engines, boilers, and auxiliary apparatus of mer-
chant ships, both domestic and foreign, and in the construction of
articles used in the fitting out of such ships (art. 14).
·
Navigation bounties.-Article 23 of the law of July 13, 1911, pro-
vides that the navigation bounties established in article 2 of the law
of July 23, 1896, as modified by article 4 of the law of May 16, 1901,
shall be continued in force for all ships having the right to such
bounties at the time of the passage of the new law, but no steamship
more than 15 years old and no sailing vessel more than 21 years old
shall receive any navigation bounty. Details as to the system of navi-
gation bounties under the laws of July 23, 1896, and May 16, 1901, are
given at pages 171 and 174, respectively, of this report.
The law provides a limit to the total credits to be voted annually
for the payment of navigation bounties, construction and repair
bounties, and bounties in the nature of a refund of duties on im-
ported materials. The total sum available for such bounties and
for the administrative expenses connected therewith can not exceed
6,200,000 lire ($1,196,600) in any fiscal year from 1911-12 to 1925-26.
A provision, however, is made for the carrying forward from one
fiscal year to another of unexpended balances (art. 17).
If the credit of 6,200,000 lire is found insufficient to provide for all
the obligations assumed in connection with this law, the Government
may, by royal decree and with the consent of the superior council of
the merchant marine, reduce the amount of the gross tonnage en-
titled under article 13 to participate in the bounties on construction
and for refund of duties on imported materials (art. 19). It should
be noted here that article 13 limits the gross tonnage entitled to par-
ticipate in construction bounties to 40,000 gross tons per year for
vessels with iron or steel hulls, dredges, and tugs (pontoon); 1,600
tons for iron and steel sailing vessels; and 8,000 tons for wooden
sailing vessels; and for not more than 40,000 indicated horsepower
in the case of engines and 2,500 metallic tons for boilers and 800 tons
for auxiliary apparatus.
Expenditures for bounties.-Details as to the annual expenditures
for each class of bounties in the years 1886 to 1910 are shown in
the table immediately following, while details as to the total expendi-
tures to December 31, 1913, for each class of bounties provided in
the laws of July 23, 1896, May 16, 1901, and July 13, 1911, respec-
tively, are shown in the three subsequent tables.
FRANCE, ITALY, SPAIN, AND PORTUGAL.
179
Years.
BOUNTIES AND DRAWBACKS PAID, 1886 to 1910.
Navigation bounties.b
Total.
Construc-
tion
bounties.a
Coal trans-
Steam-
ships.
Sailing
vessels.
portation
bounty.c
Bounties
and draw-
backs on
repair
materials.
UNDER LAW OF DEC. 6, 1885.
1886...
1887..
$735, 847
$21, 393
$170, 505
$481, 634
1888.
771, 881
$33, 196
22, 136
216, 913
464, 595
776, 385
33, 445
1889.
48, 354
205, 854
436, 935
781, 763
31, 357
1890...
83, 846
$29, 119
34, 792
53,885
237,935
393, 118
720, 657
9,402
1891.
206, 807
142, 070
293, 026
1,015, 296
19, 784
1892..
570, 057
60, 462
58,970
141,996
254, 602
705, 600
24, 095
1893.
241, 264
133,743
54, 546
234, 619
582, 854
32, 344
1894..
185, 132
63, 630
107, 434
216, 443
568, 982
17,907
1895..
200, 127
55,938
62, 168
207, 591
431, 051
22,859
1896 e
114, 763
76,237
71, 330
174, 558
409, 873
7,320
227, 287
31,057
66, 080
72, 680
3,830
75, 019
UNDER LAWS OF JULY 23, 1896,
AND MAY 16, 1901.
1896 ƒ
268, 416
1897...
171,235
97.181
675, 402
1898...
25, 739
394, 557
161, 432
1,033, 534
1899..
396, 310
93, 674
427, 221
138, 290
1, 129, 151
1900..
473, 792
71, 713
465, 670
122, 177
1, 415, 939
1901..
630, 123
67, 512
619, 363
107, 224
1, 800, 636
1902...
1,386, 051
59, 229
301, 405
62, 856
1,300, 136
1903....
895, 671
· 311, 438
39, 048
1,660, 544
1904...
881, 956
685, 842
59, 136
1, 118, 668
1905..
420, 881
616, 930
53, 419
1,316, 281
1906.
602, 423
50, 324
53,979
33, 610
27,438
654, 140
36, 092
1,398, 155
754, 549
23, 626
1907...
582, 876
39, 601
1,018, 291
351, 529
21, 129
1908...
622, 918
30, 907
1,424, 104
684, 337
42, 937
1909...
647, 255
41, 884
1,542, 412
1910...
908, 526
50, 628
569, 405
1,200, 652
506, 263
33,083
023, 954
31, 398
29, 468
40, 967
a Includes bounties on boilers, engines, and auxiliary equipment, as well as on hulls. Included under
the law of Dec. 6, 1885, bounty on floating material (Galleggianti), such as docks, scows, etc.
Includes bounty earned in years 1886 to 1901 and only the bounties paid in years since 1901.
c Abolished by law of July 23, 1896.
d Includes drawbacks only in years 1886 to 1900; chiefly fixed bounty in years 1901 to 1904; and bounty only
in years since 1901.
From Jan. 1 to Aug. 7 in case of construction bounties and from Jan. 1 to July 22 for navigation bounties.
ƒFrom Aug. 8 to Dec. 23 in case of construction bounties and from July 23 to Dec: 31 for navigation
bounties.
PAYMENTS ORDERED UNDER THE LAW OF JULY 23, 1896, TO DEC. 31, 1913.¹
Items.
Amount.
Items.
Amount.
Aggregate.
$7,142, 791
Navigation bounties, total.
$2,702, 581
Construction bounties, total.
4,098, 499
Sailing vessels....
• •
Wooden ships-
Sailing vessels..
Steamships.
79, 314
2.010
Iron or steel ships-
Steamships.
Customs drawhacks (Restituzioni da-
ziarie), total..
610, 032
2,092, 549
341, 711
Sailing vessels.
817
Repairs to merchant ships:
Steamships-
Hulls.
187,870
With Italian boilers and engines.
2,542, 022
Engines.
61,756
With foreign boilers and engines.
891, 834
Boilers.
51,060
Engines-
Auxiliary equipment..
48, 755
Italian.
261, 266
Construction of foreign war vessels..
1,270
Foreign
67, 630
Boilers-
Italian...
149,910
Foreign.
45, 082
Auxiliary equipment..
58, 614
■ Relazione sulle Condizioni della Marina Mercantile Italiano al 31 dicembre 1913, pp. 763-64.
180,
GOVERNMENT AID TO MERCHANT SHIPPING.
PAYMENTS ORDERED UNDER THE LAW OF MAY 16, 1901, FROM JAN. 1, 1901, TO
DEC. 31, 1913.¹
Items.
Amount.
Items.
Amount.
Aggregate......
$12, 445, 971
Construction bounties-Continued.
Construction bounties:
Compensi daziari-Continued.
Iron or steel hulls-
Compensi di costruzione, total..
3, 365, 375
Wooden hull, sailing vessels.
Sailing vessels..
Steamships..
$178, 069
1,580, 078
237,318
Iron or steel hulls-
Navigation bounties, total.
Sailing vessels.
6, 709, 306
295, 701
Steamships.
1,848, 886
Sailing vessels……….
Engines.
424, 312
605, 054
Boilers..
Steamships..
6, 284, 994
291, 909
Auxiliary equipment.
86, 507
Repair bounties, total.
357,835
Compensi daziari, total..
2, 013, 455
Repairs to hulls, engines, boilers, and
auxiliary equipment.
Wooden hulls—
319, 637
Sailing vessels..
Steamships.
241, 797
13,511
¹ Relazione sulle Condizioni della Marina Mercantile Italiano al 31 dicembre 1913, p. 765.
38, 198
PAYMENTS ORDERED UNDER THE LAW OF JULY 13, 1911, FROM JULY 1, 1911, TO
DEC. 31, 1913.¹
All other..
Items.
Amount.
Items.
Amount.
Aggregate...……….
$1,787, 771
Construction bounties:
Construction bounties-Continued.
Compensi daziari-Continued.
Iron or steel hulls—
Compensi di costruzione, total.
589, 089
Wooden hulls, sailing vessels……..
Iron or steel hulls—
12, 845
Sailing vessels.
Sailing vessels.
Steamships..
Navigation bounties, total.
$11,923
282, 104
810,002
18,735
Steamships.
436, 181
Sailing vessels.
Engines.
18, 200
87,110
Steamships.
Boilers.
791, 802
25, 682
Auxiliary equipment.
8, 536
Repair bounties, total...
70, 520
Compensi daziari, total……………
318, 160
Repairs of hulls, engines, boilers, and
Wooden hulls-
auxiliary equipment.
·
All other..
Sailing vessels.
55, 736
14,784
Steamships..
22,440
1,693
¹ Relazione sulle Condizioni della Marina Mercantile Italiano al 31 dicembre 1913, p. 766.
LAW OF JUNE 22, 1913.
Bounties to freight ships.-A new form of bounty for Italian ship-
ping has been provided by the law of June 22, 1913, which was en-
acted for a 10-year period and took effect on July 1, 1913. The new
bounty is paid on Italian-owned cargo steamers and on sailing ves-
sels with auxiliary power. The bounty consists of a yearly payment
equal to 21 per cent of the value of the ship. To earn the full amount
of the bounty the ship must be operated at least 160 days during the
year. If the period of operation is less than 160 days, the bounty is
reduced in proportion (art. 1).
It is further required that the ships receiving this bounty shall
have a gross tonnage of at least 1,000 tons, shall be not more than 20
years old, and shall have the highest rating of the Registro Nazionale
Italiano or other approved classification society (art. 2).
FRANCE, ITALY, SPAIN, AND PORTUGAL.
181
The following classes of ships are barred from participation in
this bounty (art. 3):
1. Ships engaged in the transportation of emigrants and other
passengers.
2. Ships making voyages in the service of lines receiving other
State aid.
3. Ships making voyages whose routes are limited in whole or in
part to those followed by a subventioned line.
4. Ships making voyages of a total length of less than 500 miles.
5. Pleasure boats.
6. Ships entitled under article 4 of the law of May 16, 1901, to
navigation bounties, so long as such bounties are paid.
The value of the ship for the purpose of computing the bounty
under this law is the contract building price less 4 per cent for each
full year since the ship was launched (art. 4). Accordingly the
bounty diminishes that amount each year and ceases altogether (as
provided in art. 2) when the ship has become more than 20 years old.
Provision is made for the fixing of the value of the vessel by the
Minister of Marine or by a commission appointed by him (art. 5).
Credits to the amount of 2,300,000 lire ($443,900) per year are
provided in the law. Unused balances may be carried forward from
year to year (art. 6). In case the total amount of bounties claimed
in any fiscal year exceeds the amount of 2,300,000 lire plus any unex-
pended balance carried over from the preceding year, such excess
shall be disposed of by reducing proportionately the several claims
(art. 7).
Ships receiving this bounty are subject to requisition by the Gov-
ernment in case of urgent public need (art. 8).
The payments made under this law are subject to a deduction of
5 per cent for the maintenance of the "caisse des invalides" of the
Italian merchant marine.
A careful reading of the law discloses no requirement that the
ships receiving the bounty shall be of Italian construction, and the
inference is, therefore, that foreign-built ships as well as domestic-
built ships are entitled to receive, these benefits.
Attention should be called to the fact that the plain intention of
the law is to establish new cargo-carrying lines. Article 3, referred
to above, expressly excludes ships already subventioned by the State
or those operating in full or partial competition with any subsidized
or subventioned line.
Other bounties.-In September, 1912, the Brazilian Federal Gov-
ernment entered into an agreement with four Italian shipping com-
panies, namely, La Veloce, Lloyd Italiano, Italia, and Navigazione
Generale Italiana, under which the four companies were to establish
jointly a mail steamship line between Italy and Brazil. The Italian
lines are required to make two voyages a month and receive 27,500 lire
($5.308) per round voyage, or 3.300.000 lire ($636,900) for the period
of five years. Two-thirds of the amount will be paid by the Bra-
zilian Federal Government and one-third by the State of São Paulo.
The purpose of the contract is to provide for the emigration of
Italian labor for harvesting the coffee crop.
In April, 1913, a provisional agreement between the Governments
of Italy and Chile was concluded, in accordance with which the two
Governments were to pay 500,000 lire ($96,500) annually to an Ital-
182
GOVERNMENT AID TO MERCHANT SHIPPING.
-
ian steamship company for the maintenance of a monthly service
between Genoa and Valparaiso and other Chilean ports. On the out-
bound trip the steamships were to call at Rio and then proceed di-
rectly to Chile by way of the Straits of Magellan. On the home
voyage the steamers were to be permitted, if the company preferred,
to proceed through the Panama Canal. It was required that the
ships should have a carrying capacity of 5,000 tons and be equipped
for the emigrant trade. The purpose of this subvention was to pro-
vide for the direct importation of nitrates from Chile. This project
failed, inasmuch as the Chilean Government did not give it the nec-
essary sanction.
POSTAL SUBVENTIONS.
Italy has paid mail subventions since 1877, when a contract with
the consolidated steamship companies, Floria and Rabattino, was
entered into. The amount paid in this form of governmental assist-
ance has been greatly increased since that time, and has for years.
furnished far greater assistance to the Italian merchant marine than
the construction, navigation, and other bounties.
For many years prior to July, 1910, the mail subventions in
force were those approved by the law of April 22, 1893, No. 195
(which came into operation on November 1 of that year), as modified
by succeeding provisions. The steamship companies receiving sub-
ventions under this law and the amounts received are as follows:
Navigazione Generale Italiana.
Puglia____.
Napoletana_.
Siciliana___
F. La Cava e Figlio.
Nederland__.
Veneziana___
La Veloce_-_-
$1, 815, 774
126, 222
19, 300
26, 648
1. 872
13, 510
212, 300
106, 150
Details as to the mail subventions approved by the law of 1893 are
given at pages 49 and 50 of the Annual Report of the Commissioner
of Navigation for 1909 and pages 107-109 of Dr. Meeker's work on
the History of Shipping Subsidies.
Following the expiration of the long-term mail contracts on June
30, 1908, there was much uncertainty as to the proper action to be
taken on the payment of subventions. The contracts were, therefore,
extended to June 30, 1910, pending an exhaustive study of the sub-
ject. Nevertheless, in spite of much inquiry and discussion the
problem continued unsolved and another temporary arrangement was
resorted to.
From July 1, 1910, to June 30, 1913, the subventioned steamship
services were regulated by provisional and definite conventions ap-
proved by the law of June 13, 1910. Since July 1, 1913, the sub-
ventioned services have been put on a definite basis under the law of
June 30, 1912.
The companies with which provisional conventions were in force
from July 1, 1910, to June 30, 1913, are as follows: Società Na-
zionale di Servizi Marittimi; Società Veneziana di Navigazione a
Vapore; Società di Navigazione a Vapore "La Veloce."
Definite conventions were made with the following lines: Società
di Navigazione a Vapore "Puglia "; Servizi dell'Arcipelago Tos-
FRANCE, ITALY, SPAIN, AND PORTUGAL.
183
cano, Carlo Allodi; Società Siciliana di Navigazione a Vapore;
Compagnia Napoletana di Navigazione; Società di Navigazione a
Vapore "La Sicania "; Linee Esercitate dal Banco di Roma;
Società Romagnola di Navigazione; Società Olandese di Navigazione
"Nederland."
The services provided for in the law of June 13, 1910, except for
certain domestic services in the Adriatic and to the smaller islands.
and the service between Tripoli and Alexandria (Egypt), were no
other than those long maintained by the Navigazione Generale
Italiana to Sardinia, Sicily, Tunis, Tripoli, Cyrenaica, Egypt, the
Levant, the Red Sea, India, and China, and by the Società Veneziana
di Navigazione to Calcutta.
The law of June 13, 1910, provided for a total annual subvention
of 13,660,000 lire ($2,636,380) to be distributed among 11 steamship
companies. The services operated by these companies, the mileage,
and the payments for the fiscal years 1910-11 and 1911-12 are shown
in the following table:
Annual subventions.
Companies.
Service.
Miles.
Lire.
Dollars.
Società Nazionale di Servizi Ma- | Sardinia, Sicili, Tunis, Tripoli,
rittimi.
1,711, 196
Società Veneziana di Navigazione
a Vapore.
Società di Navigazione a Vapore
"La Veloce.”
Società di Navigazione a Vapore
"Puglia."
Servizi dell'Arcipelago Toscano,
Carlo Allodi.
Società Siciliana di Navigazione a
Vapore.
Compagnia Napoletana di Naviga-
zione.
Società di Navigazione "La Sica-
nia.”
Lince Esercitate dal Banco di Roma.
Società Romagnola di N. vigazione.
Società Olandese di Navigazione
"Nederland."
Total..
Cyrenaica, Egypt, the Levant,
Red Sea, Zanzibar, India,
China.
9,200,000 1,775, 600
Venice to Caicutta..
152, 352
1,000,000 193,000
| Genoa to Central America.
Adriatic and subsidiary services.
Tuscan Archipelago………
Lipari Island, etc.
138,000
500,000 96,500
361,348
1,250,000
241,250
61,538
400,000
77,200
116, 813
385,000
74,305
Neapolitan and Pontine Islands.
122, 767
220,000
42, 460
Egades and Pelagic Islands, Us-
tica, and Pantillaria.
Tripoli to Alexandria.
Ravenna to Fiume and Ravenna
to Trieste.
Genoa to Batavia.
67, 210
305,000
58,865
69,816
270,000
52, 110
23, 192
60,000
11,580
367,016
70,000
13,510
3, 191, 248 13, 660,000 | 2, 636, 380
In addition to the services provided for in the law of June 13, 1910,
as shown in the above table, the State also subsidizes a special postal
and commercial service between Tripoli and Tobruk, which is as-
signed to the Banca di Roma, and grants a compensation to the Com-
pagnia di Antivari for transportation of mail between Italy, Monte-
negro, and Albania.
For the fiscal year 1912-13, the appropriations for subventions
were the same as those shown in the above table for the preceding
two fiscal years, with the following exceptions: The subvention to the
Società Nazionale di Servizi Marittimi was increased to 10,028,800
lire ($1,935,404) for 2,203,890 miles, while that to the Società Sicili-
ana di Navigazione a Vapore was reduced to 360,250 lire ($69.528)
for slightly less service. A new service was provided in the budget
184
GOVERNMENT AID TO MERCHANT SHIPPING.
for 1912-13, namely, a line operated by F. La Cava in the Eolian
Islands.
The subvention system of Italy has been altered by the laws of
June 30, 1912, December 22, 1912, and May 29, 1913, and by royal
decree of June 29, 1913. This new system went into effect on July
1, 1913, and provided at the outset for fixed subventions amounting
to 16,000,000 lire ($3,088,000) yearly for the 10 fiscal years be-
tween July 1, 1913, and June 30, 1923. Under the new system
Italian shipping is divided into four groups as follows:
I. Upper Tyrrhenian.
II. Lower Tyrrhenian.
III. The Adriatic, including the fast-mail steamship service to
Egypt.
IV. Miscellaneous services.
The law provided for an annual subvention of 6,123,000 lire
($1,181,739) for the services comprised in Group I, 4,110,000 lire
($793,230) for those in Group II, and 3,200,000 lire ($617,600) for
the Adriatic services and 2,500,000 lire ($482,500) for the fast line
to Egypt comprised in Group III.
One bid was received for the Upper Tyrrhenian service but none
for the services in Groups II and III, the subventions provided be-
ing regarded as too low for the Italian shipping companies. The
Government thereupon increased the subventions as follows: For
the Lower Tyrrhenian service to 5,180,000 lire ($999,740), for the
Adriatic to 4,500,000 lire ($868,500), and for the Egyptian service
to 3,450,000 lire ($665,850). At the same time the duration of the
contract for the service to Egypt was increased to 15 years.
The following table contains a full list of the services provided for
in the new system of subventions:
SERVICES AND COMPANIES.
Group I. Upper Tyrrhenian: Società di Navigazione Marittimi Italiana.
Group II. Lower Tyrrhenian: Società di Navigazione Sicilia.
Group III. Adriatic, including fast mail line to Egypt: Società Italiana di
Servizi Marittimi.
Group IV. Miscellaneous: Venice to Calcutta, Società Veneziana di Naviga-
zione a Vapore; Genoa to Central America, Società Italiana di Navigazione
La Veloce; Genoa to Batavia, Compagnia Olandese Nederland; Adriatic and
subsidiary services, Società di Navigazione Puglia; Tuscan Archipelago, Giu-
seppe Orlando; Æolian Islands (line to), Società Siciliana di Navigazione a
Vapore; Æolian Islands (line among), Francesco la Cava; Neapolitan and
Pontine Islands, Compagnia Napoletana di Navigazione; Egades and Pelagic
Islands, Ustica, and Pantillaria, Società di Navigazione La Sicania; Ravenna
to Fiume and Ravenna to Trieste,' Società Romagnola di Navigazione.
Many details as to the mail contracts now in force are given also
in the following extract from Fairplay of June 12, 1913, page 935:
It has already been briefly recorded that in the Italian budget for the year
1913-14 the subsidy of 9,200,000 lire ($1,775,600) granted under the law of
June 30, 1912, to the Società Nazionale di Servizi Marittimi has been increased
to 15,933,000 lire ($3,075,069), but it is necessary to add that this sum, by virtue
of the understandings arrived at, is to be divided between the three companies
which have undertaken the work formerly performed by the Società Nazionale.
On the other hand, the amount-6,200,000 lire ($1,196,600) altogether-voted
last year as shipbuilding and navigation premiums remains unaltered. The
next highest direct subvention granted by the Italian Government-that of
1 In consequence of the shipwreck of the steamship Romagna this subventioned service
was abandoned.
*
FRANCE, ITALY, SPAIN, AND PORTUGAL.
185
1,250,000 lire ($241,250) to the Puglia company-is also repeated. This is like-
wise the case with the numerous smaller subsidies for the coasting trade, for
the Dutch Nederland company, and for the service to Tripoli and Egypt worked
by the Banca di Roma. Some subventions, however, lapsing on June 30, 1913,
have been allowed to drop. They are the sum granted in aid of the Indian
line of the Società Veneziana, and also that for the Veloce company's line to
Central America. It appears to be doubtful whether these lines will again be
subsidized, as also whether they will be taken up later on by the same com-
panies. Probably some temporary arrangement will be arrived at with ref-
erence to them. Two other items have been eliminated from the last budget,
namely, the subsidy for the Chilean line and that for the transport of coal from
England for the use of the State. The first-mentioned item is dropped, in the
absence of the necessary sanction of the Chilean Government, and the second
because no offer has been made for a continuation of that service. As regards
the services taken up from the Società Nazionale, the three companies con-
cerned have already been constituted: (1) The Società Marittima takes the
Upper Tyrrhenian service; its principal financial backer is the Società Ban-
caria, and the Lloyd Sabaudo is regarded as its sister company; the Società
Marittima takes over from the Società Nazionale the seven boats, Roma,
Firenze, Tevere, Capri, Ischia, Catania, and Siracusa, and another which has
not yet been launched; (2) for the Lower Tyrrhenian group of services, the
Società Sicilia, with a capital of 6,000,000 lire ($1,158,000), founded on the
principles of the Sindacato Marittimo Siciliano, managed by Commendatore
Coppi and backed up by the Banca di Roma and the firm of Piaggio, has been
formed; this company also takes over the subsidized Tripoli-Egypt line formerly
worked by the Banca di Roma, as well as the subsidized services of the small
Sicania and Siciliana owneries; (3) the Adriatic group, as well as the line
of express steamers running to Egypt, will be worked by a company promoted
by Commendatore Breda and supported by the Navigazione Generale Italiana,
called the Società Italiana di Servizi Marittimi, and having a capital of
10,000,000 lire ($1,930,000); it is regarded as the successor of the Società
Nazionale, and also enjoys the support of three great banks; this company takes
over five vessels of the Società Nazionale (Torino, Milano, Tripoli, Benghasi,
and Derna), and is under the obligation to have new boats built for the
Egyptian line, and must employ chartered vessels until the new ones are ready.
The contract with the Government has already been signed.
•
State-owned steamship line. The law of April 5, 1908, intrusted
to the State Administration of Railroads the operation after July
1, 1910, of certain lines of navigation between the mainland and the
near-by islands.
The Annuario Statistico Italiano for 1914 (p. 278) shows that in
the year 1913 there were engaged in this service 12 steamships, with
a total gross tonnage of 30,250 tons, which operated during the year
on routes averaging 602 kilometers (375 miles) in length. The aver-
age number of persons employed during the year was 709; the num-
ber of passengers carried was 254,650; the quantity of baggage,
343 metric tons, and of merchandise, 26,994 tons.
SPAIN.
Spain now rivals France, Italy, and Japan in the extent of Govern-
ment aid to shipping. For many years the only assistance extended
to the merchant marine of Spain was of an indirect nature and con-
sisted for the most part of a restriction of the coastwise trade of
Spain, including the trade between Spain, Cuba, Porto Rico, and
the Philippines, to ships flying the Spanish flag. Under this system
the merchant marine of Spain developed slightly and held an in-
ferior place among the merchant navies of the world despite the
extensive production in the colonies of important commodities, such
as sugar, coffee, hemp, etc.
186
GOVERNMENT AID TO MERCHANT SHIPPING.
The aid afforded by the restriction of trade between Spain and its
colonies was, however, more apparent than real and is thought by
many to have been a hindrance rather than a help. This restriction
benefited Spanish citizens to a very slight extent, if any, since many
of the steamships nominally owned by Spanish corporations or
subjects were really owned and operated by British interests.¹
The policy of granting direct aid to the merchant marine of Spain
was instituted in 1861 when a mail contract with the Compania
Trasatlantica was entered into, and Spain has continued the pay-
ment of postal subventions since that date. Other forms of Govern-
ment aid have also been extended to Spanish shipping with the result
that to-day the variety and extent of governmental assistance are
very considerable.
The development of the merchant marine of Spain has been slow,
particularly in the years since 1900. In the period from 1880 to 1900
the increase in total actual tonnage was large-from 560,133 net tons
to 774,579 net tons-despite a decrease of 231,251 tons in sail tonnage.
During this period steam tonnage almost trebled. In the 11 years
between 1900 and 1911, however, the total actual tonnage increased
only 19,827.
The small increase in tonnage in recent years may be due to several
causes. Probably the most important factor is the loss of the chief
Spanish colonies after the Spanish-American War, which resulted in
the withdrawal of Spanish capital and consequent loss of trade. At
the same time, it should be noted that the State has been most in-
dulgent in granting aid to Spanish shipping during this period.
The following table shows the actual and potential net tonnage of
the Spanish merchant marine at the beginning of each 10-year period
from 1880 to 1910 and in the year 1911:
1880.
1890...
1900...
1910..
1911.
a On Dec. 31.
Years.a
Actual net tonnage.b
Total.
Sail.
Steam.
Potential
net
tounage.c
569, 133
326, 138
233,695
1,027, 523
618, 182
210, 247
407,935
1,434, 052
774, 679
95, 187
679, 392
2,133,363
789,457
44,940
744, 517
2,278, 491
794, 406
44, 325
750, 081
2,294, 568
b Includes vessels of 50 tons and over.
c Computed on theory that 1 ton of steam tonnage equals 3 tons of sail tonnage.
INDIRECT AID.
Reservation of coasting trade. It has long been the policy of
Spain to restrict the carrying trade between Spanish ports and be-
tween Spain and colonial ports to ships flying the Spanish flag.
Thus article 2 of the present subsidy law, that of June 14, 1909,
provides as follows:
Freight and passengers between Spanish ports shall be carried exclusively by
vessels under the Spanish flag.
Although the voyage may be extended to foreign ports, the trade between
Spanish ports shall be confined to Spanish vessels.
¹ Annual Report of Commissioner of Navigation for 1899. p. 15.
1
FRANCE, ITALY, SPAIN, AND PORTUGAL.
187
Exemption from import duties.-Although Spain is better situated
than France or Italy for the development of shipbuilding and its
allied industries, the domestic production of ships has developed only
to a small extent. It is natural, therefore, that Spanish shipowners
were given the privilege of purchasing ships abroad free of duty.
Since 1889, however, a system of duties on foreign-built ships coupled
with liberal bounties on ships of domestic construction has been
instituted.
Under the present customs law, approved by royal decree of De
cember 27, 1911, the following duties are imposed upon foreign-built
vessels imported into Spain:
Duties per gross
register ton.a
Character of construction and class of vessel.
Pesetas.
Dollars.
Iron or steel or composite vessels:
Without motive power.
With motive power-
Cargo ship.
Cargo and passenger ships.
Passenger ships..
Wooden vessels:
Without motive power.
With motive power.
··
Floating docks, dredges, dump scows, etc
Vessels for use as floating hulks or for breaking up..
10.50
2.03
12.00
2.32
14.00
2.70
17.50
3.38
14.00
2.70
17.50
3.38
b 15.00
b 2.90
5.00
.97
a On total measurement tonnage, without deduction for machinery space.
Per 100 kilos.
The duty on ships covers the ordinary equipment.
Materials used by Spanish shipowners for repairing their vessels
while in a foreign port are admitted free of duty, if such repairs
were urgently needed for the safety of the vessel; otherwise, a duty
must be paid on such materials upon the vessel's return to a Spanish
port, the rate varying with the character of the material used.
1
Preferential taxation.-According to the one authority, lower rates
of taxation are imposed upon Spanish shipping than upon other
Spanish industries. This authority also calls attention to the fact
that Spanish ships pay lower consular, sanitary, measurement, pilot-
age, and other port charges than are laid on foreign ships in Spanish
ports, and to the fact that the transport tax (which corresponds to
the Federal tonnage tax in the United States) has been largely re-
duced or altogether removed in the case of certain articles trans-
ported between Spanish ports.
Preferential treatment in the matter of port and tonnage taxes is
provided for in the subsidy law of June 14, 1909.
Reduced rail rates on export commodities.-Article 18 of the sub-
sidy law of June 14, 1909, provides as follows:
In order to give greater efficacy to the navigation bounties and the subsidies
to regular lines, the Government shall favor reduced rates of transportation by
the railroads for articles of national production destined for exportation. It
shall encourage, furthermore, by every means in its power, concerted action
between the railroad companies and the national navigation companies perform-
ing the services designated in Schedules A, B, and C, with the object of estab-
1 Huldermann: Die Subventionen der Ausländischen Handelsflotten und ihre Bedeutung
für die Entwicklung der Seeschiffahrt, p. 16.
188
GOVERNMENT AID TO MERCHANT SHIPPING.
lishing regular and efficacious transportation by land and sea, with special
reduced freight rates, and facilitating transportation to the coast, and the
direct exportation by Spanish ships of the principal articles of national pro-
duction, more especially of coal.
To this end the Government shall present to the Cortes, within one year, a
special project; meantime the exportation or distribution by maritime route of
national coal shall receive a premium of 0.30 peseta ($0.058), which is provi-
sionally approved.
It is not known what steps, if any, have been taken by the Spanish
Government to put these measures in force.
Export bounty on coal.-A certain indirect benefit to shipping is
contained in the export bounty of 30 centimos ($0.058) per ton on
Spanish coal provided in article 18 (quoted above) of the subsidy
law of June 14, 1909.
DIRECT AID.
BOUNTIES.
No direct bounties were paid to Spanish shipping prior to the
passage of the law of June 14, 1909. This law provided for four
classes of bounties, one for ship construction and three for the
operation or navigation of ships. The navigation bounties might
for convenience be designated as general and special, the latter being
of two kinds, namely, for specified routes with specified ports of call
and for specified routes with no specific requirement as to ports of
call.
Construction bounty.-It has long been the custom in Spain-at
least since the tariff law of 1889 to grant a bounty on ships built
in Spanish yards. The purpose of the bounty has been not merely
to compensate domestic shipbuilders for the duties paid on imported
materials but also to encourage the development of the domestic ship-
building industry.
Under the tariff act of 1889, as amended by article 9 of the budget
law of June 30, 1892, the following bounties were paid on ships built
in Spanish shipyards:
Class of ship.
Bounty per total
register ton.
Pesetas.
Dollars.
Wooden vessels.
Iron or steel vessels:
Sailing ships.
Steamships.
ન હ
40
7.72
55
10.62
75
14.48
The results obtained under this system of bounties were not en-
couraging. According to statistics compiled by Nauticus, a German
nautical publication, Spain had in 1902, 422 steamers of more than
100 tons register, of which only 10 had been built in Spanish yards,
while the remainder were of foreign construction and consisted
largely of old ships purchased at bargain prices.¹
1 Nauticus, 1901, pp. 425-429.
FRANCE, ITALY, SPAIN, AND PORTUGAL.
189
Under the subsidy law of June 14, 1909, the bounties on ship con-
struction have been greatly increased and are now very large, as is
indicated in the following tabular statement:
Class of vessel.
Wooden vessels of all classes:
Without motive power.
With motive power…….
Vessels of iron or steel or mixed construction: a
Without motive power
With motive power-
Cargo ships b
Passenger and freight ships..
Passenger ships………
• Including dredges, floating cranes, hoppers, etc.
Bounty per gross
register ton.
Pesetas. Dollars.
80
15.44
100
19.30
120
23. 16
160
30.88.
170
32.81
c 185
35.71
• Including vessels for harbor service and fisheries.
c Increased 10 per cent for each knot above 14 knots on trial trip with half cargo.
Construction bounties are paid on vessels of 10 gross register tons
and over. The law provides that the bounties shall be changed in
proportion to modifications in the customs duties on shipbuilding
materials.
The above rates of bounty are extraordinarily high. In fact they
may be called excessive, particularly for iron or steel sailing vessels
and freight steamers. One authority calls attention to the fact that
the bounty on an ordinary freight steamer of 6,000 tons would be
960,000 pesetas, or $185,280, which is "an unbelievable sum, for it
exceeds the cost of building such a ship."1
General navigation bounties.-The law of June 14, 1909, provides
that all ships of Spanish register engaged in the over-seas and the
long coasting trade shall be entitled to navigation bounties. Ships in
the over-seas trade shall be paid at the rate of 40 centimos (7.72
cents) per gross ton per 1,000 miles, and those in the coastwise
trade at the rate of 50 centimos (9.62 cents) per gross ton per 1,000
niles. The long coasting trade comprises voyages between Spanish
ports and those of the rest of Europe and of the Mediterranean
coast of Africa.
To receive a general navigation bounty the following conditions
must be complied with:
1. Vessels must have first-class rating of an approved classifica-
tion society.
2. Ships of Spanish construction are to be preferred over foreign-
built ships.
3. The entire crew, except in cases of "force majeure," must be
Spanish citizens.
4. The shipowner must contribute to the seamen's beneficial in-
stitutions.
5. Nautical students must be taken on board as apprentices.
6. Spanish mails must be carried free of charge.
7. The average amount of cargo carried during the year must be
not less than 50 per cent of the maximum capacity of the ship, and
1 Hulderinann: Die Subventionen der Ausländischen Handelsflotten und ihre Bedeutung
für die Entwicklung der Seeschiffahrt, p. 16.
190
GOVERNMENT AID TO MERCHANT SHIPPING.
of this 50 per cent at least three-fifths shall consist exclusively of
exports of Spanish production.
The law provides that the general navigation bounties shall be
paid for a period of 10 years and limits the total amount to be paid in
any one year to 2,900,000 pesetas ($559,700). No ship in the coast-
wise trade can receive in any one year bounties on more than 20,000
miles, while the bounties paid to ships in the over-seas trade in any
one year are limited to 30,000 miles.
Special navigation bounties.-The special navigation bounties pro-
vided for in the law of June 14, 1909, are of two kinds, one for
specified routes with specified ports of call and the other for specified
routes without any requirement as to ports of call.
In regard to the special routes with specified ports of call, the
specifications of the law may best be given in a tabular statement
which shows the routes, the frequency of sailings, the number, dis-
placement tonnage, and speed of ships, and the bounty per mile
for each service provided in the law:
Ships.
Bounty.
Speed (knots).
Lines to-
Sailings.
Displace-
Num- ment
ber. (ton-
nage).
Per
First Bal- Total.
three ance
mile.
years.
con-
tract.
3. Cadiz, Canaries, Montevideo, and
Buenos Aires. d
..do.
b
1. Habana and Vera Cruz a
Monthly..
5
9,000
13.5
c 7,500
15.0 $281,605
$2.31
2. Cadiz, New York, Habana, and
Vera Cruz. d
do....
6
b 9,000
12.5
13.0
€ 6,000
274, 709
1.91
5
b 9,000
13.5 15.0
c 7.500
335, 133
2.31
6
Co
b 9,000
12.5
13.0
€ 6,000
300,903
1.91
..do......
LO
5
4,500
12.5
12.5
500, 488
1.70
3
b 4,000
10.0
12.0
€ 2,400
165, 290
1. 19
4. Cadiz, Canaries, Habana, Colon,
and return via Porto Rico. d
5. Port Said, Suez, Singapore, and
Manila. a
6. Cadiz, Morocco ports, Canaries, Rio
de Oro, Sierra Leone, Monrovia,
Santa Isobel, and San Carlos. e
..do......
a From any port on the north coast of Spain.
b Average.
c Minimum.
d From any port on the east coast of Spain.
e From 1 eastern and 1 northern Spanish port.
The law provided also for the maintenance of connecting services
between Habana and New Orleans; between Habana, Savannah,
Charleston, Georgetown, Baltimore, and Philadelphia; and between
New York, Boston, Quebec, and Montreal. All of these auxiliary
services were to be operated in conjunction with principal routes
designated as No. 2 in the above table, and were to receive a bounty
of 0.66 pesetas (12.7 cents) per mile.
The same rate of payment was authorized for the maintenance,
in connection with principal route No. 3, of a branch line between
Buenos Aires, Punta Arenas, Coronel, and Valparaiso, and, in connec-
tion with principal route No. 5, the following branch lines: (1) Liver-
pool, Christiania, Copenhagen, Malmo, Libau, Riga, Stockholm, Hel-
singfors, and St. Petersburg; (2) Port Said or Aden and Sydney;
(3) Aden or Colombo and Karachi, Bombay, Bushire; (4) Colombo
FRANCE, ITALY, SPAIN, AND PORTUGAL.
191
and Calcutta; (5) Aden or Colombo and Zanzibar and Mozambique;
(6) Mozambique and Capetown.
The Compania Trasatlantica operates all of the subsidized lines
enumerated in the above table except the line to Africa, which is
operated by La Roda Hermanos.
Other services receiving the special navigation bounties provided
for by the law of June 14, 1909, are as follows:
Canary Islands: Sailings every three days between Spain and the
islands and weekly between the islands and Rio de Oro; the former
service is performed by the Industria y Navegacion Line and the
latter by the Vapores Correos Interinsulares de Canarias.
Balearic Islands: Six sailings weekly between Barcelona and Palma
and three weekly between the several islands; two of the voyages each
week between Barcelona and Palma must be run at minimum speed
of 15 knots; service performed by La Islena Maritima.
Spanish African possessions and Morocco: Regular services from
Almeria, Malaga, Cartagena, Alicante, and Algeciras; service by La
Roda Hermanos.
In addition to the conditions specified in the above tabular state-
ment, ships receiving the special navigation bounties provided under
this law must comply with the following requirements:
1. Ships must be owned by Spanish citizens and operated under the
Spanish flag.
2. Ships must have first-class rating of an approved classification
society.
3. Two-thirds of the vessels for the replacement of those on subsi-
dized service and of additional vessels therefor must be new, with
preference to Spanish-built ships, if cost of same is not more than 10
per cent above that of foreign-built ships.
4. Repairs must be made in Spanish yards.
5. Provisioning of vessels shall be made, by way of preference, in
Spain and with Spanish products.
6. Spanish coal shall be preferred to extent of at least two-thirds
of bunker capacity in case of ships leaving Spanish ports.
7. Crew under normal conditions shall be Spanish subjects.
Ships engaged in these special services must grant the following
advantages to the Spanish Government:
1. Free transportation of Spanish mail, State funds, and bullion
for coinage.
2. Carriage of Government freight and passengers at reduced
rates.
3. Assignment of ships to the Government in time of war for use
as auxiliary cruisers.
The law of June 14, 1909, imposed a number of conditions regard-
ing passenger and freight rates and service, which may best be pre-
sented in the following form:
I. Passenger rates:
1. Rates to and from Spain to be no higher than those charged by foreign
lines.
2. Ships in emigrant trade to be on a parity with foreign ships in accom-
modation.
3. Emigrant ships to give special facilities for transportation of emi-
grants to Spanish colonies in Morocco and elsewhere in Africa.
4. Thirty per cent reduction to be made in fares to commercial agents
and to official commissioners sent abroad to attend expositions.
192
GOVERNMENT AID TO MERCHANT SHIPPING.
I. Passenger rates-Continued.
5 Ten free passages to America to be granted to persons designated by
Minister of Public Instruction and sent on work in the national
interest.
II. Freight rates and service:
1. Spanish merchandise to be given preference over foreign merchandise.
2. Freight tariffs to be approved by Government.
3. Cooperation among subsidized lines enjoined.
4. Exhibits for commercial museums and exhibitions abroad to be car-
ried free.
Details as to the navigation bounties granted to lines operating on
specified routes without any requirement as to ports of call are given
in the following tabular statement:
Routes.
Group I: To Brazil, Uruguay, and Argentina and
return, calling at the Canaries a……….
Group IÍ:
To the Adriatic and return b
To the Black Sea and Sea of Azof and return b
To Algeria and return c...
To Argentina or from Argentina d.
Group III: To New York and Habana and return e..
Minimum speed.
Number
of trips
per year.
Bounty per gross
ton per 1,000 miles.
Yearly
average.
On trial. Pesetas.
Dollars.
Knots.
Knots.
52 or 104
2 22222
10
11
0.60
0.116
11
12
11
12
11
12
11
12
13
14
22224
80
154
.80
.154
.80
. 154
.80
.154
1.00
.193
a One route starting from a port in the north or northeast of Spain and another from a port in the east or
south of Spain.
b From a port in the south or east of Spain.
c From a port in the east of Spain.
From a port in the south of Spain.
e From a port in the north or northeast of Spain.
The law permits the Government to substitute one or more routes
of "equal importance" or of "greater national utility" for any of
the above-described routes. It also provides that the bounty shall
be increased 20 per cent for lines in Groups II and III upon proof
that the lines have operated at an average speed equal to that re-
quired of the next higher group, and also for those in Group I if
they exceed 14 knots.
In the distribution of these bounties vessels of Spanish construc-
tion are preferred over foreign-built ships, and the vessels longer in
service over those more recently commissioned.
The conditions imposed upon vessels applying for this form of
special navigation bounty are the same as for vessels seeking the
general navigation bounty except in the requirement as to propor-
tion of freight to be carried. The special bounty lines in exist-
ence more than two years are required to carry, on the average, cargo
and passengers to the extent of at least 40 per cent of the vessel's
maximum capacity on the outbound voyages and at least 33 per cent
on the homeward voyages. For new lines or those in existence less
than two years the proportions required are, respectively, 30 per cent
and 25 per cent.
Result of law. The direct aid to shipping provided by the law of
June 14, 1909, is, indeed, extensive in all its forms. It is interesting,
therefore, to note that since the outbreak of the present war in
Europe many of the subsidized lines have renounced their right to
the bounties. The New York Journal of Commerce, in its issue of
FRANCE, ITALY, SPAIN, AND PORTUGAL.
193
December 24, 1915, makes the following statement regarding this
action:
As a consequence of the strong position in which the Spanish lines now find
themselves, the special correspondent of the Liverpool Journal of Commerce
wires, as a result of the heavy subsidy payments already received, as well as
the most fortunate position in which neutral Spanish shipping is at present
situated, growing out of the war conditions, the Bilbao Shipowners' Association
has informed the Government that the 23 companies comprising its membership
have decided to renounce their right to receive premiums under the law of
1909. It is further stated that the Spanish Government has readily accepted
the decision of the Bilbao shipowners and has approached the shipowners at
other ports in Spain with an inquiry as to whether they can not follow the
example.
The relinquishment of the right to the bounties may be accounted
for by the great earning power of Spanish ships during the present
régime of enormous freight rates and by the desire to be released
from the restrictions that go with the bounties.
The general navigation bounties of the law of June 14, 1909, were
suspended by royal decree promulgated on January 30, 1916, as indi-
cated by the following report of the United States consul general at
Barcelona: 1
Abolition of the Government navigation subsidies (referred to in Commerce
Reports for Mar. 9, 1916) took place by royal decree which was promulgated
on January 30, 1916, suspending temporarily the shipping aid provided for in
the law of June 14, 1909.
Under that law Spanish shipping companies could claim a national subsidy
provided for them by means of a navigation tax. Before the law was enacted
80 per cent of the country's exports were under foreign flags, but during the
last five years this has been reduced to between 52 and 53 per cent. Further-
more, owing to the European conflict, circumstances have altered so that the
merchant marine of Spain is to-day in a doubly flourishing condition.
In recognition of this state of affairs many shipping companies voluntarily
relinquished their right to the subsidy, thinking it unjust to accept from the
public treasury aid which they did not require. Several other companies re-
fused, for various reasons, to forego the privilege created in their favor, chiefly
owing to contracts entered into before the war, which prevented their profiting
fully by the general rise in freights. It was claimed, however, that in one way
or another all shipping under the Spanish flag had been benefited, and it was
therefore considered unnecessary to continue to render State aid for the present.
POSTAL SUBVENTIONS.
The first direct governmental aid to Spanish shipping was in the
form of postal subventions. As early as 1861 a contract was entered
into with the Compañia Trasatlantica Espanola for the regular trans-
portation of mails to Santo Domingo, Cuba, and Porto Rico. These
subventioned services were extended so as to provide regular com-
munication with all of the Spanish possessions. Thus, the law of
June 26, 1887, approving the contract made with the Compañia
Trasatlantica on November 17, 1886, provided for a maximum an-
nual payment of 8,425,222 pesetas ($1,626,068), which were dis-
tributed as follows: 4,615,782 pesetas ($890,846) to Spain proper;
2,359,183 pesetas ($455,322) to Cuba; 337,026 pesetas ($65,046) to
Porto Rico; 1,113,231 pesetas ($214,854) to the Philippine Islands.
Earning of steamship companies.-Details as to the financial opera-
tions of Spanish steamship companies in 1911-12 and 1912–13 are
1 Commerce Reports, U. S. Department of Commerce, Mar. 23, 1916.
41987-16-13
194
GOVERNMENT AID TO MERCHANT SHIPPING.
!
given in the following table, reproduced from Fairplay of December
25, 1913, page 1106:
Companies.
. Compania Maritima del Nervion.
Compania Naviera Bachi...
Compania Bilbaina de Navegacion..
Compania Algortena de Navegacion.
Compania de Navegacion Olazarri...
Compania Naviera Sota y Aznar.
Compania Naviera Vascongada.
Compania Maritima Union.
Companies.
Compania Maritima del Nervion
Compania Naviera Bachi....
Compania Bilbaina de Navegacion
Compania Algortena de Navegacion.
Compania de Navegacion Olazarri.
Compania Naviera Sota y Aznar.
Compania Naviera Vascongada.
Compania Maritima Union.
Book value of fleet.
Profit.
Tons.
Paid up
capital.
1911-12
1912-13
1911-12
1912-13
33,500
$482, 500
$610, 562
22, 940
$555, 454
$99, 134
772,000
610, 406
579,000
25,392
63,436
405, 300
821, 215
$236, 825
158, 915
821, 215
18, 825
61, 580
648, 480
118, 734
648, 480
648, 480
34,750
53, 471
1,370, 300
97,718
1,476, 054
1,348, 230
142, 468
82, 244
2, 412,500
3, 769, 339
159, 508
29, 600
34,300
3,035, 969
389, 565
603, 125
885, 236
727, 449
763, 317
1,979, 215
70, 177
193, 631
1,928, 238
1,865, 659
74, 407
201, 724
Transferred to de-
preciation, etc.
Dividend and bonus.
1911-12 1912-13
1911-12
1912-13
$55,577 ❘ $200, 334
38, 828
121,934
$38, 600 (875) $19,300 (77%)
24, 125
188
61,580
118, 734
30, 774
22,697 (31%)
31,969 (5 %)
84, 701
74,246
193,000
310, 953
24, 449
111,575
57,900
177,560 (8%)
42, 219 (7%)
332,925 (15%)
72,375 (12%)
96,037 (5 %)
PORTUGAL.
The merchant marine of Portugal is small. On December 31,
1911, it consisted of 114,037 net tons of shipping, including 70,193
tons of steam and 43,844 tons of sail tonnage. In the 11-year
period from 1900 to 1911 the total tonnage under the Portuguese
flag increased less than 5,000, but the steam tonnage increased nearly
19,000 tons.
The following table shows the actual and potential net tonnage of
Portuguese shipping in 1900, 1905, 1906, 1907, 1908, 1910, and 1911:
Years.
1900..
1905..
1906..
1907...
1908...
1910...
1911...
a On Dec. 31.
b Includes only vessels of 15 net tons and over.
Actual net tonnage.b
Total.
Sail.
Steam.
Potential
net
tonnage.c
109, 431
57,925
51,506
101, 203
212, 443
43, 126
58,077
100, 839
217,357
38, 416
62, 423
225,685
101,038
38, 363
62,675
226,388
79, 709
37,588
42, 121
163,951
114, 037
43, 844
70, 193
254, 423
114, 037
43, 844
70, 193
254, 423
© Computed on theory that 1 ton of stea m tonnage equals 3 tons of sail tonnage.
Portugal has paid subventions to steamship lines for a considerable
period. Just when this policy was instituted is not known, but a
British report on subsidies issued in 1889 shows that in that year a
total of £30,000 ($145,995) was paid in the form of subventions to
various steamship companies. These grants, most of which have re-
FRANCE, ITALY, SPAIN, AND PORTUGAL.
195
mained unchanged, are made primarily for the maintenance of regu-
lar steamship communications between Portugal and her colonies,
and should therefore be regarded as colonial and postal subven-
tions.
The following table shows the amount expended in 1913 for sub-
ventions by the Government of Portugal:
Line.
Lisbon and Madeira…….
Azores..
Lisbon and Algarves..
Annual
payments.a
Line.
Annual
payments.a
$16,220
27,574
12, 410
Lisbon and Portuguese East Africa..
Lisbon and New York via Ponta Del-
gada and Angra and Horta.
$19,505
¿ 1,080
a Converted at the rate of $4.8665 to the pound sterling.
b Per round voyage.
It is interesting to note that Portugal has considered from time
to time the advisability of instituting a general system of ship-
building_and navigation bounties, but no such action has yet been
taken. In 1899 a bill providing for a comprehensive system of
ship bounties was introduced in the Cortes, but it failed to pass. In
1913 consideration was given to the question of subsidizing a line
between Portugal and Brazil, but apparently no definite action was
taken in the matter.
Chapter VII.-RUSSIA, ROUMANIA, BULGARIA, AND
GREECE.
RUSSIA.
The merchant marine of Russia ranks only tenth among, the mer-
chant navies of the world-an insignificant rank for so great an
Empire, but one that corresponds with the importance of its foreign
trade. Although the merchant marine of Russia is less important
than that of much smaller countries, including Italy, Holland, and
Sweden, it has in recent years made rapid progress, as is indicated
in the following table, compiled from official sources, showing the
net tonnage at the end of each five-year period between 1880 and
1910 and for the years 1911, 1912, and 1913:
1880..
1885..
1890..
1895..
1900...
1905...
1910...
1911..
1912.
1913.
Years.a
a On Dec. 31.
Actual net tonnage.
Potential
Total.
Sail.
Steam.
net
tonnage.b
467,884
378, 894
88,990
484, 784
358, 206
126, 578
645, 864
737,940
528, 987
323, 339
205, 648
940, 283
633, 821
269, 460
364, 361
1,362, 543
641,865
266,511
375, 354
1,392,573
723,562
260, 116
463,446
1,650, 454
742,802
254, 330
488, 472
1,719, 746
c
756, 605
256,844
486, 914
c 1,730, 433
d 783, 019
256, 726
513, 003
d 1,809, 025
› Computed on theory that 1 ton of steam ton age equals 3 tons of sail tonnage.
c Includes 12,847 tons of motor ships.
d Includes 13,290 tons of motor ships.
During the period from 1880 to 1913 the sailing tonnage of Russia
decreased from 378,894 to 256,726, but the steam tonnage increased
from 88,990 tons to 513,003 tons. The total tonnage of the Russian
merchant marine was 315,135 tons, or 67.4 per cent, larger in 1913
than in 1880.
Without doubt the rapid development of the merchant marine of
Russia in recent years is due largely to the various forms of assist-
ance rendered by the Russian Government. This assistance has taken
many forms, as follows:
Indirect aid:
1. Restriction of coasting trade to Russian vessels.
2. Exemptions from customs duties on seagoing vessels.
3. Preferential railway rates on tea brought to Russia in vessels of the
Volunteer Fleet.
4. Loans to steamship companies.
5. Reimbursement of Suez Canal dues.
Direct aid:
1. Bounties on construction and repair of vessels and on engines and boilers
installed in same.
2. General bounties for-
196
(a) Steamship companies operating specified ocean routes.
(b) Specified river steamship companies.
RUSSIA, ROUMANIA, BULGARIA, AND GREECE.
197
INDIRECT AID.
Reservation of coasting trade.—The privilege of operating in the
coasting trade of Russia between ports situated in the same sea has
long been reserved for vessels operating under the Russian flag. This
reservation was greatly extended by the decision of the Council of the
Empire, sanctioned by imperial decree of May 29 (June 10), 1897,
which took effect January 1 (13), 1900. This decree provided that
the entire coasting trade of Russia-that is to say, the carrying of
freight and passengers between Russian ports situated upon different
seas as well as between Russian ports situated upon the same sea-
should be the exclusive privilege of Russian subjects and of vessels
navigating under the Russian flag.¹
1
An exemption was made in the case of salt transported from ports
on the Sea of Azof and the Black Sea to ports on the Baltic Sea,
which might be carried until further orders by vessels under foreign
flags. At the same time the requirement was made that only Russian
citizens should be employed on board vessels in the coasting trade,
thus withdrawing the privilege formerly enjoyed by Russian ship-
owners of employing foreign sailors.
Under the imperial decree of May 29, 1897, the limits of the Russian
coasting trade are made fully as extensive as those of the coasting
trade of the United States. When account is taken not only of the
extent of seacoast in various sections of the Empire but also of the
great distances that separate the several Russian seas, the importance
of the restriction of the coasting trade is easily comprehended.
The extent and importance of the coasting trade of Russia are de-
scribed in the following statement from the Russian Yearbook for
1915, pages 276-277:
The coasting trade is classified into two categories, known as the greater and
the lesser coasting trade. The total traffic for both averages 12,000,000 tons
per annum, of which 11,500,000 tons belongs to the lesser coasting trade, includ-
ing the Caspian Sea, which alone claims more than a half of the total in this
class. Oil freights in the Caspian exceed 5,000,000 tons per annum, and owing
to this fact the ports of Baku and Astrakhan show the largest traffic returns of
any port in Russia (about 5,500,000 tons each). The coasting trade in the Black
Sea and the Sea of Azof comes next in importance. It is chiefly devoted to the
transport of grain for local consumption or for distribution to the chief centers
of export. But coal is a most important item; the necessity of distributing the
produce of the Donetz Basin was chiefly responsible for the rise of the Russian
Black Sea coasting trade. Russian coal is shipped principally from Mariupol
to Odessa, the total amount transported per annum being about 1,000.000 tons.
Timber, ores, Crimean salt, etc., are also largely shipped.
Coast navigation is confined to Russian subjects and vessels sailing under the
Russian flag. Exceptions are made in the case of Finnish merchantmen. The
coastwise trade and fisheries on the Caucasian littoral from Novorossisk down
to Batum have, since prior to the Russo-Turkish War in 1877-78, been in Turk-
ish hands, many of the Turks engaged in these industries having in the mean-
time become Russian subjects. Under a newly issued ministerial decree, Turks,
whether Russian or Ottoman subjects, are debarred altogether from the coast-
wise trade, and will be replaced by Russian Slavs. The cabotage will pass into
the hands of the Russian Steam Navigation & Trading Co., whose regular liners
circumnavigate the Black Sea in two connecting sections, each starting from
Odessa; the one traversing the Crimean and Caucasian coasts to Batum, the
other by way of Varna and Bourgas, on the Rumelian coast, to the Bosporus,
and thence along the Anatolian littoral to Batum. The Government will sub-
sidize the establishment of a number of Russian fisher settlements on the Cau-
casian coast.
1 Imperial decree of May 29 (June 10), 1897, sec. 1.
198
GOVERNMENT AID TO MERCHANT SHIPPING.
Exemption from import duties on seagoing vessels.-In 1898 Rus-
sian shipowners were granted the privilege of importing free of
charge ships purchased abroad. This applied to foreign-going ves-
sels of iron or steel and to steam yachts, dredging, and similar ma-
chines for deepening harbors and rivers, ice breakers specially in-
tended for ridding seaports of ice, floating docks, and vessels acquired
for the navigation of the Danube under the Russian flag. At the
same time admission, free of customs duty, was also granted in the
case of anchors, chains, and wire hawsers, imported for the fitting
out or rigging of seagoing sailing vessels, the determination of the
rules governing the duty-free admission of these metal manufactures
being left to the discretion of the Minister of Finance. This system
of exemptions was continued from time to time under various laws
until the end of 1912, when it was intended to discontinue the privi-
lege, but this practice has since been extended to January 1¯(14),
1928.¹
Preferential railroad rates.—A British report made in February,
1898, refers to a preferential railroad rate being granted on tea
brought to Russia in vessels of the Volunteer Fleet. The conditions
under which this preference was given are indicated in the following
statement made in the British report: 2
This tea, when brought to Odessa in such vessels from China, pays reduced
railway rates on conveyance to Moscow of from 10 to 20 per cent, according to
the bulk of the parcel of tea to be transported by rail, the exact initial differ-
ential rate being fixed by special arrangement within the above limits with the
wholesale China tea importers in Moscow.
Thus Ceylon tea, brought to Odessa in British vessels, would be at the disad-
vantage in point of railway rate of carriage of paying the ordinary full rail-
way scale of charges imposed for the carriage of goods of this class—this being
in evident contravention of the letter and spirit of our treaty with this country,
which stipulates for equality of treatment in matters of commerce. It must be
observed that the preferential railway rates in question are levied at the Russian
Black Sea ports exclusively in favor of goods brought in vessels of the Volun-
teer Fleet from the Far East.
Information is not at hand to indicate that preferential railway
rates were granted at that time on any commodity other than tea,
nor is there any information as to whether or not any such system is
now in operation.
Loans for the construction of vessels.-The Russian Government
has since 1904 made loans to persons constructing ships in Russian
yards. These loans may not exceed two-thirds of the value of the
Russian materials used in the construction of a ship. They are made
at interest rates of 3.8 per cent and are payable in 20 years. Com-
paratively little use has been made of this privilege since in the first
two years of the operation of the law the loans amounted to only ap-
proximately 70,000 rubles ($36,050).8
Under an agreement between the Russian Government and the
Volunteer Fleet in 1912 for the subsidizing of certain steamship
services in the Far East, it was stipulated that the Volunteer Fleet
should build six new steamships, the money for which was to be
loaned free of interest by the Government. The new ships were to
1 Law of June 5 (18), 1912, referred to in British Board of Trade Journal, Vol.
LXXVIII, 1912, p. 100.
2 Commercial Report No. 2, 1898, on bounties on the construction and running of ships,
etc. (C-8720), p. 106.
3 Huldermann: Die Subventionen der Ausländischen Handelsflotten und ihre Bedeutung
für die Entwicklung der Seeschiffahrt, p. 32.
RUSSIA, ROUMANIA, BULGARIA, AND GREECE.
199
be built, as far as possible, in Russian yards, were to have a speed of
12 knots and a carrying capacity of at least 8,000 tons, and were to
be equipped for both passenger and cargo traffic. The amount to be
loaned was 3,000,000 rubles ($1,545,000) and was to be repaid in 20
installments beginning with 1914. At the same time the Russian
Government provided shipbuilding bounties amounting to 1,800,000
rubles ($927,000) to be granted to Russian yards constructing the
new ships for the Volunteer Fleet.
A modification of this practice was instituted by a law passed in
January, 1911, which authorized until the end of 1912 the granting
of loans on very favorable terms for the acquisition of seagoing
wooden sailing vessels, newly built or building, whether constructed
in Russia or abroad, for navigation in the coastal waters of the Rus-
sian Far East.¹
Reimbursement of Suez Canal dues.-The practice of reimbursing
Russian steamship companies for Suez Canal dues was instituted as
early as 1879 and the system has been extended from time to time.
This system was extended by imperial decree of June 2 (14), 1899,
so as to include the Russian steamers sailing from a Russian port to
a port on the Indian or Pacific Oceans, via the Suez Canal or vice
versa. This decree provided for a reimbursement of the full amount
of the canal dues in the case of Russian steamers bound for or sailing
from any Russian port in the Far East, and for a reimbursement of
two-thirds of the full dues for Russian steamships bound for or sail-
ing from ports on the Indian Ocean and non-Russian ports on the
Pacific Ocean.
The system of reimbursement of canal dues was materially altered
by new conditions introduced by a law of 1910, which continued the
system until January 1, 1912. In that year the system was continued
to 1917.
It is estimated that in the years 1879 to 1906, inclusive, the Russian
Government expended in round figures 8,600,000 rubles ($4,429,000)
in reimbursement of Suez Canal dues.
DIRECT AID.
Bounties on construction and repairs.—Prior to the passage of the
law of June, 1912, the Russian Government granted no bounties simi-
lar to those given by France, Italy, and Japan for the construction
and repair of seagoing merchant ships. The necessity for this class
of bounties has probably not been so urgent in Russia as in the other
countries named, since the Russian shipyards have been kept busy
with naval construction and since the Russian customs laws have,
since 1898, permitted the free admission of foreign-built merchant
ships and equipment.
The law of 1912 granted bounties to shipyards situated within
the Russian Empire (but not in Finland or areas in which there is
duty-free importation of materials and machinery for the construc-
tion and equipment of vessels) for iron or steel merchant vessels
constructed in Russian shipyards for navigation in foreign waters
and on the River Danube and its tributaries.
1 Great Britain. Report on Bounties and Subsidies in Respect of Shipbuilding, Ship-
ping, and Navigation in Foreign Countries, 1913, p. 37.
200
GOVERNMENT AID TO MERCHANT SHIPPING.
This bounty is granted only to ships whose construction was begun
subsequent to the passage of the law and is paid at the time of the
registration of the ship in a Russian port. The bounty is paid on the
gross tonnage of the vessel and varies not only with the tonnage but
also with the character of the propelling power. The rates of bounty,
per gross ton, on the construction of the hull are indicated in the
following table: 1
Vessels mechan-
ically propelled.
Gross tonnage.
Sailing vessels with
auxiliary me-
chanical propul-
sion.
Rubles. Dollars. Rubles. Dollars.
Up to 125 tons..
126 to 300 tons..
301 to 500 tons...
501 to 725 tons….
726 to 1,000 tons..
1,001 to 1,400 tons...
1,401 to 2,000 tons.
2,001 to 3,000 tons.
Over 3,000 tons
105
54.08
84
43.26
100
51.50
80
41.20
48.93
76
39. 14
46.35
72
37.08
43.78
68.
35.02
41.20
64
32.96
38.63
60
30.90
36.05
56
28.84
33.48
52
26: 78
RINZRBROO
JOLNIHON
It is provided also that the above bounty shall be paid on foreign-
built vessels not intended for navigation in foreign seas or on the
Danube River system upon the payment of customs duties collected
for these vessels on their importation.
The law of June, 1912, also granted a bounty of 35 rubles ($18.03)
per indicated horsepower for the installation in seagoing merchant
ships of new main and auxiliary engines and boilers. This bounty
is, however, paid only to vessels entitled to the construction bounties
above specified.
A repair bounty is also granted under this law. This bounty
amounts to 1.5 rubles ($0.773) per pood (36.1 pounds) of metal
material used for new boilers, etc., and of 5.5 rubles ($2.82) per pood
(36.1 pounds) for the new main or auxiliary machinery.
The construction and repair bounties granted under this law are
conditioned upon the use of material of Russian origin in the con-
struction of the hull or its machinery. Materials of foreign origin
are allowed only on condition that they shall be named in a separate
list published annually by the Ministry of Commerce and Industry.
This law was enacted for a period of 15 years. After the tenth
year all of the above-mentioned bounties are to be reduced 6 per
cent annually.
Special construction bounties are granted to the Russian Steam
Navigation & Trading Co. and to the Volunteer Fleet. Under an
agreement, authorized by a law of 1911, between the Russian Govern-
ment and the Russian Steam Navigation & Trading Co., the latter
agreed to purchase, by specified dates, six new steamers of described
dimensions, and construction bounties at the rate of 90 rubles ($46.35)
per gross ton of 1.ull and 35 rubles ($18.03) per indicated horsepower
were to be granted if these ships should be constructed in Russian
yards.
1 Great Britain. Report on Bounties and Subsidies in Respect of Shipbuilding, Ship-
ping, and Navigation in Foreign Countries, 1913, p. 37.
RUSSIA, ROUMANIA, BULGARIA, AND GREECE.
201
Reference has already been made to the fact that the Volunteer
Fleet was required to build six new steamships in Russian yards, the
money for the same to be loaned free of interest by the Russian
Government to the amount of 3,000,000 rubles ($1,545,000). It was
also provided in this agreement that a shipbuilding bounty amount-
ing to 1,800,000 rubles ($927,000) was to be paid to the yards con-
structing these steamships.
General bounties.-General bounties paid by the Russian Govern-
ment are of two kinds, those for the maintenance of specified ocean
routes and those for the support of inland river steamers.
·
These bounties correspond closely to the navigation bounties
granted by the French Government, but they differ in one important
respect, namely, that they are not general, but are paid only to speci-
fied steamship lines for the maintenance of specified routes and for a
specified number of voyages on such routes.
Russian Steam Navigation & Trading Co.-The granting of sub-
sidies or bounties to shipping is not a new practice in Russia, for it
may be said to have begun as early as 1856. In that year the oldest
and most important of the subsidized lines, namely, the Russian
Steam Navigation & Trading Co., was organized under the auspices
of the Russian Government, which subscribed to a portion of the
capital stock. From that date to the present this company has been
the recipient of grants from the Russian Government, but the amount
of governmental aid has been reduced very considerably in recent
years. This company is now operating under two contracts. One
calls for the maintenance of a service between Odessa and the Persian
Gulf, for which an annual subsidy of 200,000 rubles ($103,000)
is given. The other contract, which was authorized by a law of
1911 and covers a period from July 1, 1911, to January 1, 1928, calls
for the maintenance of seven specified services in the Black Sea and
the Mediterranean. This service is paid for on a mileage basis, but
may not exceed in any year the amount of 900,000 rubles ($463,500).
This company is required, as stated above, under the agreement of
1911 to purchase by specified dates six new steamers of prescribed
dimensions, on which a construction bounty of 90 rubles ($46.35)
per gross ton for the hull and 35 rubles ($18.03) per indicated horse-
power for the engines were to be given if the ships should be con-
structed in Russian yards.
The Russian Steam Navigation & Trading Co. is reported to have
been quite successful, as is indicated by the fact that in recent years
in spite of a reduction in the bounty it has paid a dividend of 6 per
cent on its capital stock of 10,000,000 rubles ($5,150,000).
Volunteer Fleet. The next largest steamship company in Russia
is the Volunteer Fleet. This organization is unique in the shipping
world and is peculiarly a Russian institution. In 1878, toward the
close of the Russo-Turkish War, at a time when war with England
was threatening, four ships were purchased at a cost of about
4,000,000 rubles ($2,060,000) from funds raised by private subscrip-
tion. Each ship had a tonnage of about 3,200 tons and a speed of
13 to 14 knots an hour. The Committee on Donations had charge of
these vessels, which were equipped primarily for use as auxiliary
cruisers. When the danger of war with England was past the ships
were used for the transportation of troops on the Black Sea, after
202
GOVERNMENT AID TO MERCHANT SHIPPING.
which they were used for commercial service between European
Russia and the Pacific.
In 1879 the Volunteer Fleet Co. was organized to take the place of
the Committee on Donations, which originally had charge of these
boats. In 1883 the company was abolished and its affairs were placed
under the general supervision of the Ministry of the Marine, but
under the immediate control of a special committee consisting of rep-
resentatives of the Ministry of the Marine, the Ministry of Finance,
and the State Auditor's office.
By a law of February 24, 1886, a special subsidy of 595,000 rubles
($306,425) was granted to this company for a period of six years.
This contract called for four voyages annually between Odessa and
Vladivostok, via Hankow, with calls at Constantinople, Port Said,
Aden, Singapore, and Nagasaki; one trip annually between Odessa
and Vladivostok and return via Hongkong; and two trips between
Odessa and Port Due and the Island of Sakhalin. In all, this agree-
ment called for 140,000 miles at the rate of 4.25 rubles ($2.189) per
mile.
The agreement of February 24, 1886, was renewed for a period of
10 years by decree of January 6, 1892, and for a further period of 10
years by the law of February 4, 1902, which placed the Volunteer
Fleet completely under governmental control.
Additional subsidies were granted the Volunteer Fleet by the law
of June 15, 1908, which provided subsidies for a period of 11 years
beginning June 15, 1908, for the maintenance of regular steamship
service on the following routes: Vladivostok to Tsuruga, twice
weekly; and Vladivostok to Shanghai, via Fuzan and Nagasaki, one
voyage weekly.
The total distance covered annually on the Vladivostok-Tsuruga
service was to be 101,820 miles and on the Vladivostok-Shanghai
service 118,560 miles. The vessels employed in these services were to
have a speed of not less than 14 miles per hour after having shown
a speed of not less than 16 miles an hour on trial, and the subsidies
for the two services were fixed at the following amounts:¹
1908...
1909...
1910...
1911..
1912..
1913.
1914..
Years.
Rubles.
Dollars.
Years.
283.333
145, 916
1915..
800, 000
412,000
1916..
693,000
356,895
1917.
672,000
346,080
1918.
651.000
335, 65
1919.
630,000
609,000
324,450
313, 635
Total.
Rubles.
Dollars.
588,000
302, 820
567,000
292, 005
546,000
281, 190
525,000
270, 375
340,667
175, 444
6,905,000
3,556,075
The law of June 15, 1908, provided also for a service between
Vladivostok and Nikolaiefsk for a period of one year. Fourteen
voyages, with an aggregate distance of 33,292 miles, were to be made
on this route, an annual grant of 75,000 rubles ($38,625) being pro-
vided for this service.
The Volunteer Fleet was granted further subsidies under a law of
March 29, 1909, which provided for regular steamship service between
1 Foreign Legislation on the Merchant Marine. Letter before the Committee on Com-
merce, United States Senate, Sixty-third Congress, third session, p. 17.
RUSSIA, ROUMANIA, BULGARIA, AND GREECE.
203
1
Vladivostok and ports on the Okhotsk and Bering Seas and along
the Tartar Straits.
On the route between Vladivostok and the ports of the Okhotsk
and Bering Seas four steamships were to be used and routes covering
55,000 miles per year were to be traversed.
In the Tartar Straits two routes were stipulated as follows: Be-
tween Vladivostok and Nikolaiefsk, which is on the Amur River; and
between Vladivostok and Post Alexandrovsk. On the former route
12 voyages were to be made during the season of navigation, and on
the latter route four voyages. The contract specifies also that two
steamships should be used on the latter route.
The law of March 29, 1911, stipulated that the speed of the vessels
to be used in the various services in the Far East was to be not less
than 10 knots an hour, and the annual subvention for 1912 was fixed
at 331,000 rubles ($170,465).
The law provided also that the Volunteer Fleet was to build in
Russian shipyards six new steamships, each with a freight capacity
of not less than 8,000 tons and drawing not more than 15 feet of water
when loaded. It was stipulated also that these steamships should
have accommodation for not less than 10 first class, 30 second class,
and 300 steerage passengers. The law provided that the Government
should advance to the Volunteer Fleet for the purchase of the six
new steamships a loan of 3,000,000 rubles ($1,545,000) to be repaid
in 20 annual installments without interest. Provision was also made
for the payment of shipbuilding bounty to the shipyards construct-
ing these steamships. For this purpose 900,000 rubles ($463,500)
were to be paid in the year 1912 and 900,000 rubles also in 1913.
The degree of control exercised by the Russian Imperial Govern-
ment over the affairs of the Volunteer Fleet is clearly indicated by
the fact that the new charter and by-laws for the Volunteer Fleet
were provided for by a law approved July 5, 1912, by the Imperial
Council and the Duma. Clause 2 of article 1 of the new law and
by-laws states that the "Volunteer Fleet shall be under the super-
vision of the Minister of Commerce and Manufactures." Article 7
provides that in case of a partial or general mobilization, or any other
emergency, every vessel and any property on shore belonging to the
Volunteer Fleet shall be transferred by order of the Minister of Com-
merce and Manufactures to the temporary use or to the full possession
of the war and navy departments.
The extent to which the Russian Government controls the affairs of
the Volunteer Fleet can best be learned by a reading of the entire
charter and by-laws, which are reproduced in full in Appendix E,
page 249.
On January 1, 1914, the Volunteer Fleet comprised 32 steamers,
with an aggregate gross tonnage of 116,422 and a net tonnage of
65,651.
Russian Danube Steamship Co.-The affairs of this company are
controlled by the Russian Government to a greater extent, perhaps,
than are the affairs of the Volunteer Fleet. In fact, the property of
the Russian Danube Steamship Co. was purchased by the Russian
Government in 1903, when the company went into liquidation. Un-
der law of June 10, 1903, the company was reestablished under Gov-
ernment auspices. Section 21 of this law provides that the company
204
GOVERNMENT AID TO MERCHANT SHIPPING.
shall be under the Bureau of Merchant Marine, Department of the
Marine and Ports, and shall be managed by a board consisting of
three voting members appointed by the Chief of Merchant Marine
and Ports and a nonvoting member representing the State auditor's
office.
The immediate supervision of the operations of the company is
intrusted to a manager appointed by the board, but the board itself
handles all the property and funds of the corporation, makes out
the general plans of action, tariffs, annual budgets, and accounts,
and has supervision over the transactions of the manager, the em-
ployees, and the agents, and over all affairs of the corporation. All
money and property transactions of the organization are subject to
audit by the State auditor's office.
From a reading of these provisions of the law of June 10, 1903,
it is clear that the Russian Government not merely owns, but also
practically operates, the fleet and equipment of the Russian Danube
Steamship Co.
The company has received, since 1901, an annual grant of 313.000
rubles ($161,195) from the Russian Government. A similar grant
was made for the fiscal year 1914-15, and it was reported that the
grant would probably be raised to 357,000 rubles ($183,855) for the
period from 1915 to 1925.¹
Under the law of June 10, 1903, this organization is required to
maintain the following routes: 2
1. A mail-freight-passenger service three times a week from
Odessa to Vilkovo, Kilia, Izmail, and Reni via the Kilisk branch of
the Danube Delta, and return, calling at each of these ports.
2. A tug-freight service twice a week from Odessa to Vilkova,
Kilia, Izmail, and Reni. and return, calling at each of these ports.
In case the Kilisk branch is not navigable, the trips on the Odessa-
Reni Line shall be maintained via the Sulinsk branch of the Danube.
3. A daily service between Reni, Galatz, Isaktscha, Tultscha, and
Izmail.
4. A tug-freight service twice a week from Reni to Galatz, Brai-
low, Girsova, Tschernavodi, Silistria, Olenitza, Turtukai, Zhurzhevo,
Rushtschuk, Sistova, Ziminitza, Turn-Magurelli, Nikopol, Samovit,
Korabia, Beket, Rakhovo, Lom-Palanka, Viddin, Kalafat, Gruia,
Raduievatz, Turn-Severin, and Kladovo, and back from Kladovo to
Reni, calling at the same ports.
5. A freight service on the River Prut.
The Archangel-Murman Steamship Co.-The affairs of this com-
pany also are dominated to a considerable extent by the Russian
Government, which acquired control under circumstances somewhat
similar to those under which the property of the Russian Danube
Steamship Co. was acquired. This company is a successor of the
White Sea Murman Steam Navigation Co., which was organized in
1870 with an annual subsidy of 30,000 rubles ($15,450) for 12 trips
yearly between Archangel and points on the Murman shore. This
company failed in 1875 and was replaced by the present company,
which was granted an annual subsidy of 50,000 rubles ($25,750). In
1880 two additional trips annually were required and the subsidy
1 Russian Year Book for 1915, p. 289.
2 Letter before the Committee on Commerce, United States Senate, on Foreign Legisla-
tion on the Merchant Marine, Sixty-third Congress, third session, pp. 10-11.
RUSSIA, ROUMANIA, BULGARIA, AND GREECE.
205
was increased to 55,000 rubles ($28,325). In 1885 a new agreement
was entered into by the Government which provided for an annual
subsidy of 55,000 rubles ($28,325) for 10 years. Upon the expiration
of this agreement a new convention was entered into on May 15,
1895. The new agreement provided for an increase in the capitaliza-
tion and in the number of vessels and voyages. The Russian Gov-
ernment subscribed for about 56 per cent of the total capital, or, in
other words, for 620,000 rubles ($319,300) out of a total of 1,112,800
rubles ($573,092). At the same time the Government was given a
large share of control over the affairs of the company.
The new agreement was to run for 20 years, that is up to 1915, and
provided for an assured subsidy of 80,000 rubles ($41,200). The
rate of dividend was fixed at 5 per cent. On all profits above 5
per cent the private shareholders were to receive an additional divi-
dend of 1 per cent and the balance was to be distributed as follows:
25 per cent in bonuses to the management and employees; 37 per
cent to the insurance fund; 37 per cent for the diminution of the
subsidy.
On January 1, 1914, the fleet of this company comprised 16 steam-
ships with a total gross tonnage of 11,187, and a net tonnage of 6,392.
Only three of the vessels of this company have a gross tonnage in
excess of 1,000 tons, the tonnage of the largest boat being 1,639.
Other subsidized ocean steamship companies.-The Russian Gov-
ernment grants subsidies also to the Kavkaz and Mercury Steamship
Co. for the maintenance of regular services on the Caspian Sea, and
to Count Keiserling for steamship service in Peter-the-Great Gulf,
and between Vladivostock, St. Vladimir Bay, and Imperial Harbor.
In 1912 the subsidy granted to the Kavkaz & Mercury Steamship
Co. amounted to 287,000 rubles ($147,805) at which figure it had re-
mained since 1901. The contract of this company expired on
January 1, 1914. It is reported that the company refused to renew
the contract unless the grant were raised to 639,000 rubles ($329,085)
and that the Russian Government finding this demand too great
invited proposals from other shipping concerns, six of which, in-
cluding the Kavkaz & Mercury Steamship Co., responded.¹ The
result of this bidding is not known.
The grant to Count Keiserling amounts to about $38,600 and ap-
pears to be made on a year-to-year contract.
Additional subsidized services were provided by legislation en-
acted in 1914. A description of these services is given in the fol-
lowing extracts from the Russian Yearbook for 1915:2
The Bulletin of Laws of March 17, 1914, publishes a law authorizing the
Minister for Commerce to conclude a contract with a Russian shipping company
for a term of three years from January 14, 1915, for a regular service along
the Caucasus littoral of the Black Sea between Anapa and Soukhoum, calling
at various intermediate ports. The company undertaking the contract will re-
ceive an annual State subsidy of 60,000 rubles ($30,900), and must carry out
not less than 94 sailings per annum, with a total mileage of about 43.000 miles.
A new line of passenger and cargo steamers is to be started shortly between
Novorossisk and Batoum, calling at all the intermediate ports on the Caucasian
coast of the Black Sea. The Russian Steam Navigation & Trading Co. is said
to be running the service.
1 Russian Year Book for 1915, p. 289.
2 Idem, p. 283.
206
GOVERNMENT AID TO MERCHANT SHIPPING.
Inland river steamship companies.-Considerable number of boun-
ties are granted to river steamboat companies operating on the
Shilka, Amur, Lena, Yenissei, Ob, and Irtish Rivers, and on Lake
Baikan. The aid granted to these companies is quite substantial,
as is indicated in the following table showing the amounts paid to
river steamship companies in subsidies for the years 1906-1912:¹
1906.
1907.
1908..
1909..
Years.
Pounds
sterling.
Dollars.
41, 222
43,024
200, 607
1910...
209, 376
1911..
45, 140
219,674
1912...
70, 494
343, 059
Years.
Pounds
sterling.
Dollars.
51,722
55,060
251,705
267, 949
47, 301
230, 190
The subsidized river services, it will be noted, are for Siberian
rivers.
Regarding the services on the Shilka and Amur Rivers the Russian
Year Book for 1915 (p. 285) gives the following details:
A new law empowers the Minister of Ways and Communications to organize,
for a period of six years from 1911, a subsidized regular passenger and postal
steamship service on the rivers Shilka and Amur between Stretensk and
Nikolaiefsk, a distance of 3,018 versts (about 2,000 miles). The steamship com-
pany undertaking this service must guarantee to make not less than 32 regular
sailings yearly, and must maintain not less than seven steamers on the service.
The company will receive payment at a rate not exceeding 1.18 rubles per verst
($0.608 per mile).
Details as to the subsidized services on the Yenissei and the Ob
Rivers are given in the following extract from the Russian Year
Book for 1915 (p. 285):
At Krasnoiarsk a steamship company has been founded for the purpose of
carrying on regular trade between Petrograd and the Yenissei. Pending the
acquisition of its own ships, the company has chartered a steamer of 3,600 tons
and a speed of 9 knots, which was to make her first voyage to the mouth of the
Yenissei in August, 1914. At the mouth of the Yenissei the cargo will be
transshipped to the river craft of the Government's Yenissei fleet. As a return
cargo the company contemplates carrying timber from Siberia. In order to make
the undertaking profitable the company has requested the Ministry of Com-
merce to reduce freight rates on the State Yenissei Line.
The special commission appointed by the Russian Minister of Commerce to
study the question of establishing a steamship service between European ports
and the Siberian rivers Ob and Yenessei recommends that the line should start
from a Baltic port, and that the first voyages should be considered as exclu-
sively experimental trips.
Navigation bounties.-To encourage the development of the coast-
ing trade in the Far East the Russian Government instituted in 1914
the temporary policy of granting subsidies to Russian vessels engaged
in this trade. The owners of Russian seagoing vessels, steam or sail,
of at least 20 gross tons receive a navigation bounty of 5 kopecks
(2.6 cents) per register ton per mile. Vessels engaged in the coasting
trade between points of the Priamur Government north of latitude 50
degrees north receive 75 kopecks (38.6 cents) per register ton per mile,
provided they are not receiving other Government aid."
Ships engaged in the far eastern coasting trade have been granted
an exemption from the requirement that coasting vessels shall have
1 Great Britain. Report on Bounties and Subsidies in Respect to Shipbuilding, Ship.
ping, and Navigation in Foreign Countries, 1913, p. 36.
The Russian Year Book, 1915, p. 289.
RUSSIA, ROUMANIA, BULGARIA, AND GREECE.
207.
crews consisting entirely of Russian subjects. Under a law of Jan-
uary, 1911, whose operation was extended to January 1, 1915, such
vessels were permitted to have crews consisting of not less than 50
per cent Russian subjects.
ROUMANIA.
The merchant shipping of Roumania is small, but it is distin-
guished by the fact that the bulk of it is owned by the State. Ac-
cording to statistics shown in Lloyd's Register for 1914-15, the mer-
chant marine of Roumania in 1914 comprised 36 ships of 100 tons
and over, including 34 steamships with a total net tonnage of 36,164
and 2 sailing vessels with a combined net tonnage of 678.
According to Lloyd's Register, the number of steamships in the
Roumanian merchant marine increased from 13 to 34 and their net
tonnage from 14,419 to 36,164 in the period from 1902 to 1914.
The Roumanian Government undertook the operation of steamships
in 1897, and at the outset two mail steamers were placed on the line
between the Black Sea port of Constantza and Constantinople, and
another steamer on a line between various Danubian ports of Rou-
mania and Constantinople. In addition, three cargo boats were
placed on a line between Roumanian ports on the Danube and Rot-
terdam. Shortly thereafter two steamers were placed in service in
carrying mails and general cargo between Constantza and Alexan-
dria, Egypt.
The latest statistics available as to the operations of the State
lines are to be found in the Statistical Year Book of 1912, and are
for the fiscal year 1909-10. In that year the Oriental Line operated
on the services to Constantinople and Alexandria five mail steamers,
four of which had a speed of 18 knots and one a speed of 17.8 knots.
The gross tonnage of these ships was as follows: 1,605, 2,369, 3,147,
3,152, 3,363. In that year these vessels made 105 voyages, with a
total mileage of 124,461 miles. The Oriental Line maintained a
biweekly service between Constantza and Alexandria, calling at Con-
stantinople, and a weekly service between Constantza and Alexan-
dria, calling at Constantinople, Smyrna, and Piraeus.
In the fiscal year 1909-10 the Occidental Line, which carried grain
from the Danubian ports of Roumania to Rotterdam, operated five
cargo boats, three having a speed of 9.5 knots and two a speed of 10.3
knots. The gross tonnage of these boats ranges from 2,125 to 2,255
tons. In the year 1909-10 these vessels made 46 voyages, with a total
mileage of 157,312. The following table shows the tonnage and
receipts from outbound and homeward cargoes:
Kind of cargo.
Metric
tons.
Receipts.
Kind of cargo.
Metric
tons.
Receipts.
To Rotterdam……
75, 899
$121, 754
From Rotterdam.
65, 490
$162, 511
Grain.
73, 105
Lumber
1,792
115, 055
3,680
Coal.
Iron...
37,542
87,739
General merchandise.
2,378
3,869
1,002
General merchandise.
25,570
70, 903
3,019
It is reported that the Roumanian Government operates also a serv-
ice of boats on the Danube River, but details are not at hand as to the
number of boats or frequency of service.
208
GOVERNMENT AID TO MERCHANT SHIPPING.
BULGARIA.
The merchant marine of Bulgaria is small and comprised in the
year 1913-14, according to statistics prepared by the Bureau Veritas,
only eight vessels of more than 100 tons, including five steamers with
a total net tonnage of 2,776 and three sailing vessels with a total net
tonnage of 402 tons.
The only Bulgarian steamship line now receiving subsidies from
the Government is the Bulgarian Steam Navigation Co., which
operates local services on the Danube. The Bulgarian Government
owns one-fourth of the capital stock of this company and under the
original contract paid the company an annual subsidy equal to 9 per
cent of the paid-up capital stock, or about 180,000 francs ($34,740).
In return, the company was to carry the mail free of charge and to
transport soldiers, State employees, and munitions at one-half the
usual rates. In later years it is believed the subsidy has been paid
on a mileage basis. A British report on ship subsidies issued in 1913
states that this company receives a mileage subsidy varying from 2
francs ($0.386) to 5 francs ($0.965) per mile and was paid the fol-
lowing amounts in the years 1900 to 1912:
1900..
1901..
1902.
1903..
1904..
1905...
1906..
Year.
Amount of
subsidy.a
$27, 213
1907.
25,476
1908...
25,476
1909..
33.775
1910.
55,970
1911.
64,076
1912..
72, 182
Year.
Amount of
subsidy..
$73, 726
95, 728
76, 621
65, 813
77, 200
66, 585
a Converted at the rate of $4.825 to the pound sterling.
For a number of years prior to 1910 the Bulgarian Government
paid subsidies to the German Levant Line and the Compagnie Mar-
seillaise de Navigation à Vapeur Fraissinet et Cie. The former com-
pany, under a contract that went into force on September 1, 1900, re-
ceived an annual subsidy of 120,000 francs ($23,160) and agreed to
have its steamers call at the Bulgarian ports of Varna and Burgas
twice monthly both on the outbound and on the return voyages.
The contract with the Fraissinet Line took effect in November,
1902, and provided for an annual subsidy of 50,000 francs ($9,650), in
return for which the company agreed to have its steamers call regu-
larly at Varna and Burgas on their voyages between Marseille and
Odessa.
The amounts paid in subsidies to these two lines in each year from
1902 to 1909 are reported to have been as follows:¹
1
1902...
1903..
1904.
1905.
Year.
Amount of
subsidy.2
$22, 195
22, 195
1906.
1907...
32, 424
33,003
1908..
1909.
Year.
Amount of
subsidy.2
$33,003
32, 424
22, 388
29, 143
¹ Great Britain. Report on Bounties and Subsidies in Respect of Shipbuilding, Ship-
ping, and Navigation in Foreign Countries, 1913, p. 10.
• Converted at the rate of $4.825 to the pound sterling.
RUSSIA, ROUMANIA, BULGARIA, AND GREECE.
209
GREECE.
According to statistics on world's tonnage of merchant shipping of
over 100 tons, as recorded by Lloyd's Register for 1915-16, the mer-
chant marine of Greece ranks twelfth among the merchant navies of
the world, and is only a little smaller than the merchant navies of
Russia and Austria-Hungary. Until comparatively recent years the
merchant marine of Greece consisted very largely of sailing vessels
and declined steadily, but in the period from 1900 to 1910 the
total net tonnage increased about 40 per cent, while the steam tonnage
increased 110 per cent. Much of the steam tonnage, it is reported,
has been purchased secondhand. The merchant marine of Greece
has been distinguished by the fact that until 1901 the bulk of its ton-
nage consisted of sailing vessels. The extensive use of sailing vessels
may be due chiefly to the character of the trade of Greece, which is
largely with the nearby countries and the islands of the Mediter-
ranean Sea.
The following table shows the actual and potential net tonnage in
the Greek mercantile marine in 1870, 1875, 1890, 1900, 1905, 1910,
1911, 1912, and 1914.
1870..
1875...
1890..
1900.
1905...
1910....
1911...
1912...
1914..
Actual net tonnage.
Years.
Total.
Sail.
Steam.
Potential
net
tonnage.a
404, 063
398, 703
5,360
262, 032
414, 783
253, 791
8, 241
271, 386
278, 514
226, 702
44, 684
319, 303
360, 754
175, 867
143, 436
39S, 383
606, 175
177,271
221, 112
840, 607
447,069
145, 284
301, 785
495, 841
1,050, 639
32, 871
462, 970
1, 421, 781
484, 905
100, 459
384, 446
997, 118
136, 680
860, 438
1,253,797
2,717,994
a Computed on theory that 1 ton of steam tonnage equals 3 tons of sail tonnage.
INDIRECT AID.
Reservation of coasting trade. The coasting trade of Greece is
not reserved for vessels under the Greek flag, but it is open to the
vessels of all nations that grant reciprocal treatment to Greek
shipping.
Exemption from import duties.—It has long been the custom in
Greece to grant free admission to all foreign-built vessels of more
than 300 tons register belonging to Greek subjects if registered in
a Greek port within eight days. Foreign-built ships of less than 300
tons are subject to a duty of 101.50 drachmas ($19.59) if new and
50.75 drachmas ($9.80) if secondhand. The tariff laws of Greece
have also long permitted the free importation of material necessary
for the building or repair or fitting out of vessels.
41987°-16- -14
210
GOVERNMENT AID TO MERCHANT SHIPPING.
5
DIRECT AID.
The only direct financial aid extended to Greek shipping has been
the payment of mail subventions. The following table shows the
amounts paid in grants of this kind in the years 1901 to 1910:
1901....
1902....
1903....
1904....
1905...
Years
Postal sub-
ventions
$40, 250
1908...
39, 386
1907...
44,390
1908..
40, 704
1909...
40, 926
1910...
Years.
Postal sub-
ventions.*
$42,069
59,396
83, 772
72,032
77, 234
British Report on Bounties and Subsidies in Respect of Shipbuilding, Shipping, and
Navigation in Foreign Countries, 1913, p. 36.
• Converted at the rate of $4.825 to the pound sterling.
Chapter VIII.—JAPAN.
Japan rivals France in the extent of Government aid to shipping,
and the subsidy legislation of Japan has been modeled to a large
degree upon that of France. The results in Japan, however, have
been much more successful than those obtained in France. Whether
this is due wholly or largely to Government aid is doubtful, since
basic economic conditions in Japan have been and still are more favor-
able for the development of a merchant marine than those obtain-
ing in France. It is undoubtedly true, on the other hand, that Gov-
ernment aid in Japan has been a stimulus to a more efficient utiliza-
tion of the economic conditions.
The development of the Japanese merchant marine coincides not
only with grants of Government aid, but also with the awakening
of the industrial and commercial activities of the Japanese nation,
which followed the conclusion of its successful war with China.
Prior to 1880 the merchant shipping of Japan consisted largely of
native junks. In that year, however, there were a number of ships of
the European type of construction, with a total net tonnage of 89,309.
The increase in the use of European ships was comparatively slow
until 1893 and 1894, when the war with China compelled Japan
to purchase a large number of steamers for use as transports. This
event gave tremendous impetus to the development of the Japanese
merchant marine on modern lines, and of Japanese industry and
trade as well. This advantage was followed up by the passage of
the subsidy law of October 1, 1896, which brought about a further
increase in tonnage.
The war with Russia in 1903-4 compelled the Japanese Govern-
ment to buy large fleets of steamers for use as transports, thereby
adding greatly to the tonnage under the Japanese flag. In the period
from December 31, 1903, to December 31, 1905, the gross tonnage of
steamships increased 275,316 tons, or nearly 42 per cent. In the en-
suing two years, those of 1906 and 1907, the development of steam
tonnage continued, but at a much slower rate, while the years 1908,
1909, and 1910 show comparatively small gains in steam tonnage.
The development of the Japanese merchant marine since 1910 is
well described in the following extract from an article by Dr. W.
Müller on the Development and Present Position of the Over-seas
Shipping of Japan:¹
Not until 1911 is any considerable increase of tonnage noticeable, but the
increase in that year was not due so much to an improvement in the economic
situation of the country as to the new tariff law which went into effect in July,
1911, and which raised the duty from 10 per cent ad valorem to 15 yen ($7.47)
per gross register ton on imported ships less than 10 years old, and to 10 yen
1 Die Entwicklung und gegenwärtiger Stand der überseeischen Dampschiffahrt in Japan.
Weltwirtschaftliches Archiv (Gustav Fischer), Jena, July 1, 1915.
211
212
GOVERNMENT AID TO MERCHANT SHIPPING.
($4.98) per gross ton on ships over 10 years old, and the passage of which was
preceded by a large importation of foreign steamers. Thus, in 1911 alone there
were imported 50 ships, valued at 3,600,000 yen ($1,792,800), as against only
16 ships, valued at 865,000 yen ($430,770), imported in 1910. Furthermore,
new commercial treaties with foreign countries went into effect at the same
time, in which Japan reserved the privilege of coastwise traffic to domestic
ships, while under the old treaties foreign ships had been allowed to engage in
coastwise traffic between the principal ports of Japan. This, as well as the im-
proved condition of the ocean-freight market, explains why the domestic ship-
building industry, which was to derive the largest benefit from the high duty
on imported ships, has been considerably busier since 1911 than in the pre-
ceding years. The fears that the increase of the Japanese merchant marine
brought about by all of these factors would soon depress the freight market
were shown to be groundless, as the general situation the next year was favor-
able to high freights. The demand for tonnage was further increased by the
Italo-Turkish and the Balkan wars, which held up a great part of the world's
stock of merchant ships, so that throughout the year 1912 charter rates were
maintained at a high and attractive level. The conditions were even more
favorable in 1913, inasmuch as, owing to the increasing capacity of the Chinese
and the Manchurian markets for absorption and the favorable situation of the
Japanese coal-export trade, the Japanese ships were fully utilized on their
outward trips and found good return cargoes in China, India, and Amer-
ica. Under these conditions it is hardly to be wondered at that the years 1912
and 1913 were particularly favorable to the progress of the Japanese merchant
marine. To be sure, the Japanese shipbuilding industry showed itself the less
equal to the increased demand for ships, as the cost of production was still
too high, notwithstanding the far-reaching aid of the State, and the shipyards,
with their limited equipment, were unable to satisfy the sudden demands. This
explains why in 1912 as many as 25 ships, valued at 3,949,000 yen ($1,966,602),
and in 1913 as many as 20 ships, valued at 4,000,000 yen ($1,992,000), were
imported from abroad.
The increased Japanese import duty, in connection with the 11 per cent regis-
tration fee, brought about a highly remarkable result. On January 1, 1912, an
ordinance went into effect in the Japanese leased territory of Kwantung (Dairen,
Port Arthur) permitting the free registration of ships in the port of Dairen
(Dalny). And as, moreover, Dairen is a free port, without import duties, the
advantage of having foreign-bought ships registered at Dairen was clearly evi-
dent. An increasing number of shipowners began to establish bureaus or
agencies in. Dairen, their chief purpose being to save the high fees charged in
Japan, while making Dairen a base of operations was a matter of secondary
consideration. To be sure, ships registered at Dairen, even though flying the
Japanese flag, are considered as foreign to the extent that they may not engage in
the coastwise traffic in the waters of Japan. On the other hand, their working
zone is not limited to the neighborhood of their home port, but extends partly
beyond Hongkong into the South Sea (Java, Singapore, Saigon), and in part also
to the Pacific coast of America. In 1912 there were registered at Dairen 35 ships
of 45,000 gross tons. On July 1, 1914, the number was 108 steamers of 234,000
gross tons, of which 56 steamers of 203,734 gross tons were engaged in an irregu-
lar oversea traffic. Thus this action has resulted in a large increase of the num-
her of Japanese tramp ships, which have become noteworthy competitors of
Western shipowners, notably the Norwegians, not only in east Asiatic but also
in more distant waters.
At the instance of owners of tramp ships in old Japan who saw their in-
terests prejudiced by the freedom of the ships registered at Dairen, the Govern-
ment, in March, 1914, placed a tax of 30 sen (15 cents) per net registered ton
on ships domiciled at Dairen, but this tax is still very small in comparison with
the taxes charged in the mother country and has not checked the increase in the
number of ships registered at Dairen.
With the development of the Japanese merchant marine has come
a more extensive use of large and fast ships. Between January 1,
1909, and January 1, 1914, the number of steamers of more than
5,000 gross tons increased from 32 to 55, there being an increase of
20 in the number of vessels of 5,000 to 10,000 gross tons, and of 3 in
the number of vessels of more than 10,000 tons. On January 1, 1914,
JAPAN.
213
there were 41 ships with a speed of 15 knots and over, as compared
with 30 such ships on January 1, 1908.
Although the over-seas trade of Japan has increased rapidly, the
merchant shipping flying the Japanese flag is occupied chiefly in
trade between points in the Far East. In this connection the follow-
ing extract from the article by Dr. W. Müller will be of interest: ¹
1
The growth of Japanese shipping, both absolute and relative, is certainly
striking, but, nevertheless, the importance of Japanese shipping in the world's
traffic should not be placed too high. It must even be said that Japanese ship-
ping, for the present, exhibits a local character, inasmuch as the principal field
of its activity lies in the Far East. Let us consider, e. g., a circle described
with a radius of about 1,180 miles, reaching as far as Hongkong, around Kobe,
the largest and most centrally located port of Japan. It will be found that
hardly one-sixth of the total Japanese steamer traffic lies outside such circle.
To be sure, Japan sends its own ships even to Europe, North and South America,
and Australia, but still the share of Japan's flag in the traffic of the greatest
ports of the world, such as New York, Antwerp, Hamburg, Rotterdam, London,
as well as the important Suez Canal, is negligible. It is only in Hongkong, the
chief port of the Far East, that Japanese shipping holds second place. Accord-
ing to a report of the German consul at Hongkong, the entrances at that port
have been:
British.
Japanese..
German.
•
Nationality.
1911
1912
Num-
ber.
Net regis-
tered tons.
Num-
ber.
Net regis-
tered tons.
1,952
509
3,800,000 1,977
1,400,000
3,900,000
592
1,600,000
657
1,100,000 637
1,100,000
In 1913, according to press reports, the tonnage of Japanese ships entering
Hongkong rose to 1,900,000, surpassing the German flag by no less than 800,000
tons. How far, if at all, the approaching opening of the Panama Canal may
extend the limits of Japanese navigation will be discussed below; here it
should be mentioned, however, that the Japanese have as good as decided to
establish a freight steamship line to New York via the Panama Canal. Apart
from this, however, the Japanese are making strenuous efforts to extend the
radius of their field of activity. This is indicated by a number of innovations
introduced in recent years, such as the placing in service of large steamers of
more than 10,000 tons capacity on the European line of the Nippon Yusen
Kaisha; the various extensions of the trans-Pacific service, particularly the
placing in service of large ships of 13,381 gross tons on the Hongkong-San
Francisco line of the Toyo Kisen Kaisha; the substitution of new ships for
older ones on the Seattle line of the Nippon Yusen Kaisha; the preparations
made by the Osaka Shosen Kaisha for an extension of its Tacoma line; the
activity of the Japanese shipyards; the great shipbuilding program of the
Nippon Yusen Kaisha, commented on below. This is indicated finally by the
manifest determination of the Government and Parliament to maintain the
subsidy policy and the recent enlargement of the Japanese tramp fleet by the
purchase of old steamers. In all these endeavors the Japanese do not shrink
even from sharp rate wars, as shown by the rate war between the Calcutta line
of the Nippon Yusen Kaisha and the British India Steam Navigation Co., which
has now lasted for two years, has exacted considerable sacrifices, and led to
international complications. Clear-sighted Japanese themselves naturally are
well aware that many of all these enterprises are not the result of economic
needs, but owe their existence principally to a desire to increase the pres-
tige of the Japanese flag through the greatest possible extension of its sphere
of activity, a desire that reckons on liberal support by the Government.
These endeavors to secure all ocean traffic between Japan and other countries
¹ Die Entwicklung und gegenwärtiger Stand der überseeischen Dampschiffahrt in Japan.
Weltwirtschaftliches Archiv (Gustav Fischer), Jena, July 1, 1915.
214
GOVERNMENT AID TO MERCHANT SHIPPING.
for Japanese ships found a characteristic expression in a memorial presented
by the Yokohama Chamber of Commerce to the prime minister in the autumn
of 1913, recommending that faster steamers be put in service on all subsidized
transoceanic lines; that the stops in intermediate ports be shortened; and that
the European service be extended to Hamburg as the last port of call.
Whether the Japanese lines, which are dependent upon Government subsidies
even now, will be able in the future to compete with the great and wealthy
European and American world lines, whose traffic relations with the Far East
will likewise gain in importance owing to the economic opening of China and
the opening of the Panama Canal, is another question. In recent years, as is
known, serious protests have been made in Japan against ship subsidies, which
are paid out of the limited wealth of a people taxed to the utmost and which
are ever increasing automatically. All in all, however, it may be assumed that
the Government will hardly change its subsidy policy—at least for the present-
even though it has made, and still may make, slight concessions to the opposi-
tion party in the form of more or less insignificant reductions.
The following table¹ shows the actual and potential tonnage of
the Japanese merchant marine in the years 1885, 1890, 1895, 1900,
and 1905 to 1913. The data for the years up to 1895 are given in
net tonnage and for the subsequent years in gross tonnage:
1885..
1890...
1875…….
1900.
1905...
1906..
1907..
1903..
1909...
1910....
1911...
1912...
1913...
Years.a
a On Dec. 31.
b Prior to 1895, net tonnage.
Actual gross tonnage.b
Total.
Sail.
Steam.
Potential
gross
tonnage.c
112, 256
52,643
59, 613
145, 692
51,880
93, 812
254, 692
41, 471
213, 221
840,632
306, 393
534, 239
1, 260, 187
328, 126
231, 482
333,316
681, 134
1,909, 110
932, 061
1,378, 141
344, 399
1,033, 742
1, 464, 030
355, 338
1, 108, 692
1,522, 800
1,575, 736
1, 614, 887
370, 225
1, 152, 575
385, 779
390, 796
1, 189, 957
3, 124, 309
3,445, 625
3,681, 414
3,827,950
3,955, 650
1, 224, 091
1,787, 624
4,063, 069
412, 541
1,375, 083
1,871,368
4,537, 790
2, 001, 288
441, 039
487,347
1, 430, 329
4,732, 026
1,513, 941
5,029, 170
c Computed on the theory that one ton of steam tonnage equals 3 tons of sail tonnage.
INDIRECT AID.
Reservation of coasting trade.-For a number of years the coast-
ing trade of Japan, at least between the so-called "open ports," was
open to the ships of other nations, but this privilege was withdrawn
in the years 1910 and 1911. The monopolization by Japanese ships
of the coasting trade of Japan has been a factor of some importance
in the development of Japanese shipping in recent years.
Exemption from import duties. At the present time an import
duty of 15 yen ($7.47) is levied on foreign-built vessels less than 10
years old and of 10 yen ($4.98) on vessels over 10 years old. Prior
to July 1, 1911, the duty was 10 per cent ad valorem on all imported
ships.
Despite the newness of the Japanese merchant marine and the lack
of facilities for producing merchant ships as cheaply as they can be
purchased abroad, Japan has not granted free admission to foreign-
1 Résumé Statistique de l'Empire du Japon.
JAPAN.
215
built ships. Much attention has been given to the development of the
domestic shipbuilding industry, and the Government has since
1896 paid liberal bounties on ships constructed in Japanese yards.
Although these bounties have been more than ample to offset duties
paid on imported raw materials for the construction of ships, they
have not enabled the Japanese shipbuilding industry to produce ships
as cheaply as they can be built abroad. Consequently, many of the
ships purchased by Japanese shipping companies are built in British
yards.
DIRECT AID.
Prior to 1896 the only assistance given to Japanese shipping con-
sisted of mail subventions. which amounted to 945,000 yen ($470,610)
per year in 1890 and 1891, and to 930,000 yen ($463,140) annually
in the years 1892 to 1895. In two laws which came into operation on
October 1, 1896, and which are known, respectively, as the ship-
building encouragement law and the navigation encouragement law,
construction and navigation bounties were introduced for the first
time and provision was made for a greatly extended postal service.
66
LAWS OF OCTOBER 1, 1896.
Construction bounties.-Construction bounties were granted to
any company composed of Japanese subjects exclusively as members
and shareholders which shall establish a shipyard conforming to the
requirements of the Minister of Communications and shall build
ships." The rates provided were as follows: For vessels of over 700
tons and less than 1,000 tons, 12 yen ($5.98) per gross ton; for ves-
sels of over 1,000 tons, 20 yen ($9.96) per gross ton. In addition a
bounty of 5 yen ($2.49) per horsepower was granted for the installa-
tion of engines constructed in Japan.
The act provided that only Japanese materials could be used in
vessels receiving construction bounties unless permission to use for-
eign materials was obtained from the Minister of Communications.
Navigation bounties.-The navigation bounties granted were only
for iron and steel steamships owned exclusively by Japanese subjects
and. plying between Japan and foreign ports. The basic rate was 25
scn (about 12.5 cents) per gross ton per 1,000 miles run for a ship of
1,000 tons operating at a speed of 10 knots per hour. An additional
10 per cent was granted for each additional 500 tons up to 6,000 tons
and 20 per cent for each additional knot up to 17.
The navigation bounties were paid not only to vessels built in
Japan but to foreign-built ships less than 5 years old and owned ex-
clusively by Japanese.
The act of October 1, 1896, provided for 15 subsidized routes call-
ing for an annual expenditure of 4,964,404 yen ($2,472,273) when
fully operative. The payments were given ostensibly for postal
service, but they were computed at the mileage rate given for navi-
gation bounties and might therefore be regarded as a special navi-
gation bounty or subsidy, especially since the amount of mail carried
was then insignificant. A line to Europe, two lines to the United
States, and one to Australia were among those provided for in this
law.
216
GOVERNMENT AID TO MERCHANT SHIPPING.
Result of law. The effect of the laws of October 1, 1896, was felt
immediately, as is clearly brought out by the following statement
of Dr. Meeker in his History of Shipping Subsidies:¹
The Nippon Yusen Kaisha increased its capital from 8,800,000 yen ($4,382,-
400) to 22,000,000 yen ($10,956,000), and ordered from England 18 large freight
steamers, aggregating 88,000 tons. The Osaka Shosen Kaisha ordered 13 steam-
ers, and other companies doubled or trebled their fleets. It was thought that
one had only to build steamships in order to become wealthy. The overproduc-
tion of ships forced freights down, and this, coupled with the economic crisis
of 1898-99, brought severe losses upon the shipping companies, notwithstanding
the large subsidies. At the same time the Government felt the necessity of
contracting these expenditures for subsidies, which were rapidly growing be-
yond all reasonable limits. The sums expended for bounties on construction
and subsidies to navigation, including the postal contract lines, were as follows:
1896, 1,027,275 yen ($511,582.95); 1897, 2,127,086 yen ($1,059,288.83); 1898,
4,132,123 yen ($2,057,797.25); 1899, 5,846,956 yen ($2,911,784.09); a total of
13,133,440 yen ($6,540,453.12).
Because of the heavy financial burdens imposed by these large
subsidies it became necessary for the Government to amend part of
the act of October 1, 1896. Accordingly by an act of March, 1899,
the navigation bounties granted foreign-built ships less than
5 years old were reduced by one-half, while the navigation subsidies
for the specified postal routes were limited to fixed annual payments.
Under this law the Nippon Yusen Kaisha received for 10 years from
January 1, 1900, an annual subsidy of 2,673,874 yen ($1,336,937) for a
fortnightly service to London and Antwerp, with 12 steamers each of
6,000 tons or over, operated at a speed of not less than 14 knots, and
an annual subsidy of 654,030 yen ($325,707) for a monthly service to
Seattle, with three 15-knot steamers of at least 6,000 tons each. This
latter service the company increased of its own accord in 1901 to a
fortnightly service. For a monthly service via Manila, Brisbane,
Sydney, and Melbourne the company was to receive 525,657 yen
($251,779) yearly and to operate three steamers of at least 3,500
tons each at a minimum average speed of 14 knots. By the act of
February 23, 1900, the Nippon Yusen Kaisha was granted another
annual subsidy of 446,300 yen ($222,257) for a line to Bombay and
for services to various east Asiatic ports.
The Osaka Shosen Kaisha received under the act of March, 1899,
a yearly subsidy of 341,500 yen ($170,067) for operating various
postal routes to China, Chosen (Korea), and South China. The
Toyo Kisen Kaisha was granted an annual subsidy of 951,700 yen
($473,747) for a monthly service to San Francisco on condition
that it should operate on this route three steamers of at least 6,000
tons at a speed of at least 17 knots. An arrangement was made by
this company with the Pacific Mail Steamship Co., which was then
operating under the American flag, whereby the two companies
should make their voyages alternately. Another Japanese line re-
ceiving subvention under this act was the Daito Kisen Kaisha. This
company was granted 54,750 yen ($27,256) per year for maintaining
a line to Shanghai.
LAWS OF JANUARY 1, 1910.
Navigation bounties.-The navigation encouragement law of 1896,
as modified by the acts of March, 1899, and February 23, 1900, con-
1 Meeker: History of Shipping Subsidies, 1905, p. 141.
JAPAN.
217
tinued in force until the close of the year 1909. In January, 1910,
it was superseded by the ocean lines subsidy law, which provided,
however, that ships receiving subsidies under the old law might con-
tinue to receive the same until the expiration of their contracts in
1914, but that in such cases they could not subsequently receive grants
under the ocean lines subsidy law. The latter law applies only to
lines operating to Europe, Australia, North America, and South
America. This act did not affect other foreign-going lines, which
received until 1914 subsidies under the old navigation encouragement
law. It did not, moreover, affect the subsidized lines plying between
ports of Japan and the neighboring islands.
As stated above, the new law applies only to specified foreign
routes with regular services, and the bounties provided therein are
paid only to vessels over 3,000 gross tons, less than 15 years old, and
having a speed of not less than 12 knots per hour.
Foreign-built vessels, except those which have been registered in
Japan since September 30, 1899, and have held a Japanese register
for not less than five years, and for which the consent of the Minister
of Communications has been obtained, are excluded from this bounty.
It will be observed that the new law increased the minimum speed
requirement from 10 knots to 12 knots per hour. At the same time
the subsidy was doubled; that is, an allowance of 50 sen (about 25
cents) instead of 25 sen (about 12.5 cents) per ton per thousand knots
was granted. No increase in the subsidy was given on account of ton-
nage in excess of 3,000 tons, but provision was made for an increase
of 10 per cent for every additional knot above 12, instead of 20 per
cent for each additional knot above 10. It is also provided that the
subsidy should be reduced 5 per cent annually after the fifth year.
A vessel of 3,000 tons capacity, with a speed of 12 knots, received
under the old law a subsidy of 45 sen (about 22.5 cents) per thousand
knots run, as compared with 50 sen (about 25 cents) per thousand
knots under the new law. A vessel of 6,000 tons capacity and of 15
knots speed received under the old law 75 sen (about 37.5 cents) per
thousand knots, but under the new law it can not receive more than
65 sen (about 32.5 cents) per thousand knots. It is clear, therefore,
that the new law does not, on the whole, increase the navigation
bounty granted under the act of 1896, while it excludes from its
benefits vessels of between 1,000 and 3,000 tons, which were granted
subsidies under the old law.
The act of January, 1910, introduced several new features. In the
first place, it provided for a reduction of 5 per cent for every year of
age above 5, and, secondly, it granted an increase up to 25 per cent
above the normal rates for vessels built according to plans approved
by the Government. Under the old law navigation bounties were
paid to foreign-built vessels not more than 5 years old, but under the
new law such vessels receive bounties only in exceptional cases.
Moreover, foreign-built vessels are now entitled to only one-half the
regular rate of subsidy, while under the old law they received the
full rate until 1899.
Subsidized ships must carry free of charge all Japanese mails and
any officials sent on special duty by the Minister of Communications.
They must also carry apprentices, the number of which varies with
the size of the vessel.
218
GOVERNMENT AID TO MERCHANT SHIPPING.
·
The ocean lines subsidy law of January 1, 1910, gives the Minister
of Communications a large measure of control over the subsidized
lines. For example, the law provides that the fixing of passenger
fares and freight charges shall be subject to the approval of the
Minister of Communications, who may at his discretion specify the
kind of passengers and cargo for which charges are to be reduced;
that the Minister of Communications shall be consulted in regard
to arrangements for maintaining regular service in accordance with
the act; that the Government may determine, within certain limits.
the number of students of navigation that shall be employed on the
subsidized lines; that no foreigners may be appointed as clerks at
the principal offices or the branch offices of the subsidized companies
or as members of the crew of vessels used for subsidized navigation
without the consent of the Minister of Communications. The law
provides also that lines engaged in subsidized navigation shall pre-
sent profit-and-loss statements and reports on the condition of their
business in accordance with regulations which the Government may
issue, and that the Government may, if it deems it necessary, cause
inspections to be made of the accounts and condition of the subsidized
lines. Article 13 provides that the following matters shall be deter-
mined by the Minister of Communications:
(1) Starting point, terminus, and ports of call of subsidized lines.
(2) Number, gross tonnage, speed, and age of vessels to be used, and matters
relating to substitution of vessels.
(3) Number of voyages to be made, number of days for each voyage, and
matters relating to schedules of departure and arrival.
(4) Method of paying subsidies.
(5) Refund, abolition, suspension, and reduction of subsidies owing to failure
to perform obligations, or matters relating to any other disciplinary measures.
The law provides further that vessels which are, or have been,
subsidized may not be sold, chartered, or mortgaged to a foreigner
within three years from their last subsidized voyage. This provision
does not, however, apply where the subsidy is returned, or where
special circumstances arise, or where the consent of the Minister of
Communications has been obtained.
Further indication of the large measure of control exercised by the
Minister of Communications over the affairs of subsidized lines is
afforded by article 14, which reads as follows:
With regard to matters relating to the obligations of those engaged in sub-
sidized navigation, the Minister of State concerned may give orders directly to
the representative of the same or to the captains concerned.
Construction bounties.-A new construction bounty also came into
force on January 1, 1910, under the law of that date which may be
designated as the law for the encouragement of shipbuilding. This
law provides that ships receiving its benefits must be constructed by
Japanese subjects or by firms consisting exclusively of Japanese sub-
jects, and must, moreover, be constructed under the supervision of
and in accordance with regulations drafted by the Minister of Com-
munications. They must be built of steel and be of 1,000 tons or
more gross tonnage. The rate of bounty ranges from 11 sen (about
6.5 cents) to 22 sen (about 11 cents) per gross ton of hull.
For the purposes of this subsidy ships are divided into two classes
and four grades. Class A comprises all ships with sleeping accom-
modations for 50 or more first and second class passengers, or with
JAPAN.
219
accommodations for one or more first or second class passengers
per 100 tons gross tonnage. Class B includes all ships not comprised
under class A.
Grades 1, 2, 3, and 4 include ships classified under the correspond-
ing grades of the Shipbuilding Survey Regulations and having the
proper equipment for ocean voyages.
The following rates of bounty per gross ton of hull are paid to
ships constructed in compliance with this law:
Grade 1..
Grade 2.
Grade 3.
Grade 4.
Grade.
Class A.
Class B.
Sen.
Cents.
Sen.
Cents.
21
19
14
2222
22
11.0
19
10.5
18
9.5
16
0000
9.5
9.0
8.0
7.0
11
5.5
The above rates apply only to the gross tonnage of the hull, but a
further bounty of 5 sen (about 2.5 cents) per actual horsepower is
granted if the engines are built with the vessel, or, in other words,
in Japan; provided further, that the sanction of the Minister of Com-
munications has been previously obtained. In the construction of ves-
sels receiving a bounty under this law, foreign manufactured articles
can not be used for the hull, engines, or equipment except in accord-
ance with regulations laid down by the Minister of Communications.
Several other forms of subsidy are granted to shipping by the
Japanese Government; for example, a special grant for the training
of seamen and another for lifeboats.
The following table shows amounts paid in the years 1897 to 1911
in subsidies to the merchant marine of Japan: 1
Navigation bounties.
Years.
Total.
Special General.
Construc-
tion
bounties.
Bounty
Subsidy
for train- Lifeboat to Konan
bounties.
ing of
seamen,
routes.
Steam-
ship Co.
1897....
1898..
$625, 535
1,879, 442
$306, 590
$360, 121
269, 367
1,397, 659
$6,507
106,820
1899..
2, 639, 103
452, 244
1,992, 637
93, 213
1900.
2,734,048
2,074, 492
601, 207
1901...
80, 249
3,419,592 2,678, 522
451,271
287,955
1902..
3,606, 563 | 3,062, 488
337,686
208, 384
1903.
$4,969
3, 606, 5633, 356, 425
$9,933
$4,258
399, 296
215, 717
1904.
4,969
9,933
1,259, 450 1,216,625
12, 653
14, 113
101, 223
2,482
1905.
1,285, 243
828, 765
4,964
18, 103
285, 615
41,317
1906...
2,482
3,357, 855
4,964
2,805, 537
18, 249
503, 683
248, 824
2.482
1907..
4,964
4,362, 331
3, 593, 910
20,537
471, 194
1908..
338, 514
2,482
9,933
4,995, 462
3,511, 666
688, 902
799,079
2,482
1909
9,933
6.057,333 4,219, 742
1910....
1,401, 939
639, 458
2,482
9,933
6,525,003
1911....
6,826, 483
5,911, 338
5,747,310
910, 572
559, 161
2, 482
9,933
867, 644
578, 890
2,482
9,933
1 Data for years 1897-1901 have been obtained from Journal of Royal Statistical So-
ciety for April, 1911, p. 500, and those for the years 1902-1911 from the British Report
on Bounties and Subsidies in Respect of Shipbuilding, Shipping, and Navigation in For-
eign Countries, 1913, p. 23.
220
GOVERNMENT AID TO MERCHANT SHIPPING.
A number of local services have been in receipt of subsidies since
1905, as is indicated in the following table,' which shows the subsidy
paid for each service in the years 1905 to 1911, inclusive:
Service.
1905
1906
1907 1908
1909
1910
1911
Ogasawara Island
Ogasawara and neighboring islands.
$7,689
Shimane Prefecture and Oki Island.
Kagoshima Prefecture and neighboring islands 8,049
404
$7,689
404
8,049
$7,689 $7,689
754
11,329 | 11,329
754
$7,689
754
Okinawa Prefecture and Saki Island.
2, 681
11,329
2,681
2,681 2,681
$7,689
754
11,329
$7,689
754
11,329
2, 681
2, 681
Izu Islands.
Okinawa Prefecture and neighboring islands..|
Hokkaido..
4, 472
2,681
3,728
4,098
4,472
4, 472
4,472
2,681
2, 681
4, 472
2,681
2, 681
2,681
2, 681
2, 681
96, 459
87,943
87,943
94,323 | 103,038
3, 129
3,757
The following table, compiled from the British report on subsidies
issued in 1913, shows details as to number, size, and speed of boats.
and frequency of sailings required on the subsidized lines coming
under the direct control of the Minister of Communication at the end
of March, 1910:
Routes.
Vessels.
Company.
Number of sail-
ings.
Num-
ber.
Gross ton-
nage.
Speed.
Knots.
Europe
North American:
Seattle...
Tacoma...
San Francisco..
South America
coast).
Australia.
China:
Nippon Yusen Kaisha…….. 1 fortnightly..
do.
(west....do..
Shanghai-Hankow.
Nippon Yusen Kaisha...
Nisshin Kisen Kaisha.
11
6,000-9,000
14-16
1 every 4 weeks...
3
6,000-6,500
13-14
Osaka Shosen Kaisha..
Toyo Kisen Kaisha.
1 fortnightly..
6
6.000-6,500
13-14
1 every 4 weeks..
3 13.000-14.000
18-20
1 fortnightly...
3
5,000-9, 300
12-17
1 every 4 weeks..
3
3,500
16
4 weekly.
Hankow-I-Chang..
.do.
6 monthly
12
6
2,000
11
1,500
10
Shanghai-Soochow.
.do.
(300 or more
3
a 8
FOS
5
yearly.
3
a 15
4
a 8
Shanghai-Hangchow...
.do.
do.
5
10
4
a 15
4
a 8
5
Soochow-Hangchow.
...do..
..do...
4
a 15
3
@ 8
5
Chinkiang-Singkian-po..
.do.
10 monthly....
3
a 15
Hankow-Shangtan.
.do..
8.monthly
2
a 900
Hankow-Changteh.
...do..
2 monthly.
1
a 900
~~
7
7
Poyang Lake……….
..do..
12 yearly.
1
...
Oriental and home route:
Shanghai..
Nippon Yusen Kaisha.
2 weekly.
6
2,500
14
North China….
..do.
1 weekly
4
1,400
Yohohama-Newchang.
.do.
1 every 3 weeks..
2
Korea-North China...
...do.
1 every 4 weeks..
Vladivostok.
..do..
.do...
Honshu-Hokkaido
..do.
branch.
Aomori and Hakodate...
..do.
1 daily.
..do….
112
1,400
12
1,400
2
700
Dairen
Osaka Shosen Kaisha….
2 weekly
24
2
700
10
1,500
13
Kushunkotan:
Hakodate-Odomari.
Nippon Yusen Kaisha.
Tsuruga-Vladivostok.
do..
40 yearly
1 weekly
21
2
700
2,000
** 220 22 20
14
12
10
10
14
Sea of Japan: Otaru-Vladi-
Vostok-
"A" Line.
"B" Line..
Osaka Shosen Kaisha.
do..
14 yearly..
8 yearly.
1
1,400
11
a Or over.
Regarding the ports of call on the more important subsidized
lines, the following data, which are of March 31, 1910, will be of
interest: 8
1 Great Britain: Report on Bounties and Subsidies in Respect of Shipbuilding, Ship-
ping, and Navigation in Foreign Countries, 1913, p. 24.
Idem., pp. 27–30.
Idem., p. 27.
JAPAN.
221
European Line.-Outward voyage: Kobe, Moji, Shanghai, Singa-
pore, Penang, Colombo, Suez, Port Said, Marseille, London, Ant-
werp, and Middlesborough. Homeward voyage: London, Marseille,
Port Said, Suez, Colombo, Singapore, Hongkong, and Kobe.
Seattle Line.-The eastern voyage (between Yokohama and
Seattle) Victoria is called at on outward and homeward voyages.
The western voyage (between Yokohama and Hongkong): Kobe,
Moji, and Shanghai are called at on both voyages.
Tacoma Line.---The eastern voyage, between Yokohama and Ta-
coma. The western voyage (between Yokohama and Hongkong):
Kobe, Moji, and Shanghai.
San Francisco Line. The eastern voyage (between Yokohama
and San Francisco): Honolulu is called at on outward and home-
ward voyages. The western voyage (between Yokohama and Hong-
kong): Kobe, Nagasaki, and Shanghai are called at on outward
and homeward voyages.
South American Line.-The eastern voyage (between Yokohama
and Coronel): Honolulu, Salina Cruz, Callao, Iquique, and Valpa-
raiso. The western voyage (between Yokohama and Hongkong):
Kobe and Moji.
Australian Line.-Outward and homeward voyages: Kobe, Naga-
saki, Hongkong, Manila, Thursday Island, Townsville, Brisbane,
and Sydney. Moji is sometimes called at on outward voyage.
The following table shows the subsidies paid by the Japanese
Government in 1910 and 1911 for services in the Formosan trade,
with the steamship company operating the service, number and
gross tonnage of boats, and frequency of sailings required:¹
Routes.
Vessels in 1911.
Subsidy.c
Company.
Number of
sailings.
Num-
ber.
Gross
tonnage.
1910
1911
..do..
Kobe-Keelung
Takow-Yokohama.
Formosa coast...
Nippon Yusen Kaisha.
Osaka Shosen Kaisha. 1 weekly......\{
Osaka Shosen Kaisha. 2 monthly.
3 monthly.
2223
b 6,400 $57,668 $58, 807
b 6, 209 109,010
2,800-4, 400
50,028
62,048
54, 626
Tamsui, Amoy..
1,500-1, 600 73, 484 | 116, 747
Swatow, Hongkong
….do.
1 weekly..
2
1,500❘ 50,612
48, 188
Takow, Anping.
Amoy, Swatow.
.do.
1 fortnightly...
1
1,800 21,899
Hongkong, Canton
35, 720
China coast (Hongkong-
.do..
3 monthly.....
2
1,800 81,271
Shanghai).
Takow-Keelung.
Foochow-Shanghai.
Foochow-Hongkong.
··
do.
...do..
2 monthly.....
(c)....
1
1,800
45, 142
1
1,800
47, 195
a Converted at the rate of $4.8665 to the pound sterling.
Tonnage of 1 vessel not specified.
c Not specified.
Regarding the amounts provided for subsidies on the European,
North American, South American, and Australian routes for the
years 1916-1919, the following extract from Fairplay of April 23,
1914 (p. 840) is of interest:
On Saturday, the 7th of March, the Japanese Government submitted to the
Lower House a bill for the amendment of the shipping subsidy law, which
provides that the Government is authorized to grant subsidies to the Euro-
pean, North and South American, and Australian services, the sum not ex-
ceeding the undermentioned figures for a term of five years commencing from
¹ Great Britain: Report on Bounties and Subsidies in Respect of Shipbuilding, Ship-
ping, and Navigation in Foreign Countries, 1913, p. 31.
222
'GOVERNMENT AID TO MERCHANT SHIPPING.
the fourth fiscal year of Taisho (1915-16), in accordance with the provisions
of the ocean steam service subsidy law:
•
1915-16.
1916-17...
1917-18....
1918-19.
1919-20....
Years.
European.
North South
American American.
Australian.
$998, 485 |
$2, 264, 916
$170, 226
987, 318
2,368, 950
166, 653
956, 474
2,326, 121
163, 079
$117, 714
118,926
109, 667
921,516
2,274, 848
159,506
115, 983
861, 464
2, 172, 913
151, 633
129,002
Compared with the figure for last year, the amount of subsidy proposed to be
granted for the European service for the fourth fiscal year shows a decrease
of 1,011,000 yen, the amount for the South American Line of 255,000 yen, and
that for the Australian service 159,000 yen. Thus, the total of the subsidies
for the three lines mentioned is to be reduced by about 1,400,000 yen. The
Nippon Yusen Kaisha Seattle service or the Osaka Shosen Kaisha Tacoma line
is to be struck off from the list of the subsidized services, and one of these is
to be extended to New York via the Panama Canal. It is proposed to grant an
annual subsidy of over 4,000,000 yen to the North American lines-San Fran-
cisco, Seattle, or Tacoma and Panama services-showing an increase of about
319,000 yen on the total of the subsidies paid for the three services mentioned
for last year..
We learn that the plan of the Government is to have eight cargo boats of
about 10,000 tons on the Panama service with Kobe and New York as termini, a
steamer leaving either terminus once every three weeks. For this line about
1,700,000 yen will be allotted.
The subsidized lines of Japan have been extended in several direc-
tions even since the outbreak of the present war in Europe, as is indi-
cated by the following extract from United States Daily Commerce
Reports of January 31, 1916:
The American ambassador at Tokyo, Japan, reports under date of December
20, 1915, that the embassy is informed by the Nanyo Boeki Kaisha (South Sea
Commercial Co.) that a contract has been concluded between that company and
the Japanese department of the marine for the operation of a line of steamers
between Japan and the islands of the Caroline group. The contract provides for
an annual subsidy to the South Sea Commercial Co. amounting to 42,000 yen
($20,916).
A monthly service will be maintained on the main line between Yokohama
and Truk Island, from which two subsidiary lines will be operated, one to the
islands on the east, including Jaluit, Kusaie, and Ponapi (Ascension), and the
other to those on the west, including Yap, Pelew, and Angour.
The steamer Yoshinomaru, which will be employed on the main line, left
Yokohama on its first voyage on December 12 last, and the Koyomaru and
Heijunmaru detailed for service on the subsidiary lines sailed from Yokohama
on November 18.
One object of the new line will be to promote trade with the islands mentioned
and to facilitate visits thereto by merchants and capitalists who may be inter-
ested in the development of the natural resources of the islands. Tours of in-
spection have already been made by official commissions, scientific parties, and
representatives of commercial houses.
The liberality of the subsidies granted by the Japanese Government
have been the subject of much bitter discussion in the Diet on various
occasions. In this connection the following statement will be of
interest:
While the amount demanded for fiscal year 1915-16 was 1,400,000 yen
($697,200) smaller than the appropriation for the preceding year, the chief
object was to safeguard the position of the new Panama line regardless of the
fact that the general policy of economy would not permit an increase of the
budget. Nevertheless, the opposition made use of this opportunity for some
harsh criticisms of the subsidy policy. It was shown that the Japanese ship
¹ Dr. W. Müller: Die Entwicklung und gegenwärtiger Stand der überseeischen Dampf-
schiffahrt in Japan. Weltwirtschaftliches Archiv, July 1, 1915.
JAPAN.
223
subsidies were the most extravagant in the world. Japan pays a yearly subsidy
of 10 yen ($4.98) per ton of the merchant marine, as compared with 1.15
yen (57 cents) in the United States, 82 sen (41 cents) in Germany, and 40 sen
(20 cents) in Great Britain. A Government subsidizes an industry on the supposi-
tion that it will some day grow strong and independent, for the object of the
subsidy is the strengthening of the industry, not the extension of the subsidy.
With the Japanese ship subsidies just the reverse is true; not once have they
been reduced, but on the contrary, with the growth of Japanese shipping, the sub-
sidies have been largely increased, and the contracts renewed again and again,
as if the subsidies were to be paid forever.
Notwithstanding these attacks which, it may be observed, are of periodic occur-
rence, the Government subsidy bill in question was passed by the lower house
but did not become a law owing to the rejection of the entire budget. The sub-
sidy agreements expire with the end of the calendar year 1914, and the possi-
bility that they might have to operate for a quarter of a year without State
subsidies has caused some anxiety among the shareholders of the companies
concerned, as far as may be judged from what has appeared in the press.
Earnings of Japanese steamship companies.-In view of the large
amounts expended by the Japanese Government in ship subsidies, it
is interesting to note the relation between the dividends, the net earn-
ings, and the subsidy grants of the Japanese shipping companies. A
basis for such a study is given by the data in the following table,
which shows for the years 1904-1913, the main items of what is in
effect a consolidated financial statement of all of the larger incor-
porated shipping companies in Japan. This table shows that while
in every year of the 10-year period covered an average dividend in
excess of 7.5 per cent was paid, the total amounts received in subsidies
exceeded the net earnings in ever year except 1904, 1905, and 1913.
In other words, in every year except these three, no dividend could
have been paid without the Government grant; in fact, there would
have been a deficit. Moreover, in each of the three years in which net
earnings exceeded the Government grant, the excess was small.
Items.
Number of companies a.
Vessels:
Number..
Gross tonnage.
Capital:
Authorized…….
Paid-up
Reserve.
Profit and loss account:
Receipts, total..
Operating revenues..
Miscellaneous receipts..
Subsidies
Expenditures, total..
Operating expenses..
Miscellaneous...
Net earnings...
Balance carried over from preceding
year..
Distribution:
Reserve...
Bonuses.
Dividends-
Amount...
Rate (per cent)..
1904
1905
1906
1907
1908
10
12
13
16
18
301
375,863
326
417,365
344
491, 258
537
543
527,766
564, 179
$21, 149, 562
17,080, 902
8,075, 884
$22, 294, 962 $25, 183, 362 $29, 864, 562 | $33, 201, 162
18,911,052 | 21,497,166 | 28, 453, 315
9,448, 393
29,517,207
9,811,974 | 10, 199, 155
10,965, 652
17,049, 023 | 18,845, 172 20, 722, 218 25, 427, 755
24,647, 927
13,950, 320
1, 171, 524
1,927, 179
16, 166, 325
1,574, 066
1, 104, 781
16, 284, 429
|
19,338, 696
19,309, 191
1,984, 003
2,453, 786
1,928,254
1,044, 286
4, 160, 805
4,294, 450
14. 661, 413
16,509,504 18,722, 663 | 23, 229, 508
22, 732, 051
14, 253, 019
408,394
2,387, 610
16, 132, 034
377,470
2,335, 668
18,305, 394
417, 269
1,999, 555
22,658, 978
570, 530
22, 311, 040
2, 198, 247
421, 011
1,915,875
691, 718
868, 541
807,036
425, 433
253, 286
195, 101
139, 960
270, 156
130, 130
165, 910
337,994
208, 112
109, 285
203, 208
117,024
1,896, 808
2,020,736
11.8
12.3
1,985, 734
9.8
2,168, 572
8.7
2,096, 729
8.0
• Includes only steamship companies having an authorized capital of 300,000 yen ($149,400) or more,
but does not include steamship companies engaged in the shipping trade as a secondary business.
224
GOVERNMENT AID TO MERCHANT SHIPPING.
Items.
1909
1910
1911
1912
1913
Number of companies a.
Vessels:
Number..
Gross tonnage.
Capital:
·
Authorized..
Paid-up..
Reserve..
Profit and loss account:
Receipts, total……..
Operating revenues..
Miscellaneous receipts.
Subsidies
Expenditures, total..
Operating expenses..
Miscellaneous…..
Net earnings....
Balance carried over from preceding
$33, 524, 862 $33,564, 702
29,904,994 | 30,598, 403
12,064,092 13, 199, 235
25, 114, 129 | 27,161,000
20
20
20
18
23
538
575, 872
535
454
600, 042
648,866
419
702, 738
582
785, 190
$33, 696, 672
$33,397,872
$35, 101, 032
|
30, 694, 878
|
30, 204, 206
31, 117, 032
15, 265, 480
18, 810, 140
22,507, 614
29,547,826
33,063,058
18,668,878
935, 227
5,510,024
22,982, 313
5,782, 109
23,321,374
20,363, 918 | 22,357,370
1,014,973 1,106,918
6,083, 538
25, 846,350
1,314, 610
5,902, 098
37,048, 470
29, 695, 951
1,614,584
5,737,935
25, 240, 403
27,913, 852
29, 227, 963
22, 143, 479|
838,834
2, 131, 815
22,771,881
549, 493
3,839, 627
24,748,181 |
492, 222
27, 409, 375
504, 477
4,307, 422
5, 149, 207
28, 476, 922
751, 041
7,820, 506
year.
b 239,362
b 220, 201
614, 485
1,066, 978
Distribution:
703, 588
Reserve.
Bonuses..
187,325
107, 198
895,909
1,428, 687
2,565, 179
·117,927
145, 107
190, 709
4,315, 252
211, 980
1,879,277
1,968, 786
7.8
9.7
2,417, 514
9.3
2,752,434
2,930, 596
10.7
Dividends-
Amount...
Rate (per cent).
14.2
a Includes only steamship companies having an authorized capital of 300,000 yen ($149,400) or more,
but does not include steamship companies engaged in the shipping trade as a secondary business.
b Deficit.
Facts similar to those shown in the above table for all of the
larger shipping companies in Japan are shown for the years 1909–
1913 for the three largest companies, Nippon Yusen Kaisha, the
Osaka Shosen Kaisha, and the Toyo Kisen Kaisha, in the table on
pages 225-226.
It will be observed that the amount received in subsidies exceeded
the net earnings in every year of the five-year period in the case of
the Toyo Kisen Kaisha, in four out of the five years in the case of
the Nippon Yusen Kaisha, and in three years out of five in the case
of the Osaka Shosen Kaisha.
The Nippon Yusen Kaisha paid a 10 per cent dividend in each of
the five years and set aside large amounts for the reserve fund in
four of the five years, but without financial aid from the Japanese
Government, not only could no dividend have been paid and nothing
set aside for reserves in these four years, but a large deficit, ranging
from about $62,000 in 1912 to about $1,940,000 in 1909, would have
resulted.
The weakness of the financial position of the Toyo Kisen Kaisha
is indicated by the fact that this company had a loss of $124,346 in
1909, despite a subsidy of $1,026,169, and by the fact that the subsidies
amounted to about 40 per cent of the total income of the company in
1910, 1911, 1912, and 1913.
JAPAN.
225
Items.
NIPPON YUSEN KÄISHA.
1909
1910
1911
1912
1
1913
Capital:
Vessels:
Number..
Gross tonnage..
Authorized...
124
343,386
106
289,784
105
280,050
310,956,000 $10,956,000 $10, 956,000
Paid-up......
10,956,000
10, 956,000
10, 956,000
Reserve....
10,665, 701
11,694, 489
13, 454, 172
15, 644, 745
15, 644, 745
79
324,573
$10, 956,000 |
10, 956, 000
10,956,000
82
346, 017
$10, 956, 000
10.956,000
18,429, 642
Profit and loss account:
Receipts-
Operating revenues..
9,378, 147
Miscellaneous receipts....
|
9,881,611 10,308, 123
11,977, 694
656, 607
753, 591
794,976
Subsidies
3,245, 113
3,052, 680
2.900.959
Expenditures-
965, 159
2,533,723
13,394, 809
1,145,294
2,408, 300
Operating expenses.
9,673, 139
11,490, 946
Miscellaneous..
11,807, 138
2,302.187
179.747
7,612
13, 004, 503
306
13,950, 419
72, 444
Net earnings...
Balance carried over from preceding
1,304, 541
2,017, 189
2.189.309
2,471, 768
2.925, 540
year.
Distribution:
Reserve..
Bonuses
Dividends-
Amount..
Rate, per cent…..
115,067
199,554
426, 487
378, 303
405,235
65,227
635, 429
1,082, 666
1,277, 534
1,689, 317
59,227
59,227
59,227
71, 702
73,261
1,095, 600
1,095, 600
1,095, 600
1,095, 600
1,095, 600
Balance carried forward to next year….
OSAKA SHOSEN KAISHA.
10.0
199, 554
10.0
426, 487
10.0
378, 303
10.0
405, 235
10.0
472,597
Vessels:
Number.
Gross tonnage..
Capital:
Authorized...
Paid-up.....
Reserve...
Profit and loss account:
Receipts-
Operating, revenues.
Miscellaneous receipts....
Subsidies
133
123,236
134
136, 430
134
150, 570
132
169,986
$8,217,000
8,217,000
923, 485
$8,217,000
8, 217, 000
994, 818
$8, 217,000
8,217,000
1,150, 244
$8, 217, 000
8,217,000
2, 194, 212
142
178,716
$8, 217, 000
8,217,000
2,746, 459
5, 180, 917
5,933, 619
Expenditures-
Operating expenses.
Miscellaneous..
142,594
807, 003
124, 841
1,038, 321
6,610, 918
140, 777
1,256, 291
7,401,997
151,427
1,285,088
8, 559,096
210, 234
1,282, 396
4,528,823
6, 405,999
6,896, 720
33, 624
73, 012
138,760
7,651, 702
120, 323
6,623, 794
146, 532
Net earnings....
1,568, 066
617, 769
972, 505
1,066, 488
3,281, 401
Balance carried over from preceding
year..
Distribution:
170, 421
186,519
249, 019
548, 726
62,700
Reserve..
1,030,462
Bonuses
28, 486
Dividends-
31, 125
31,125
48,804
800, 535
1,999, 221
48,804
53,535
80,925
Amount...
493, 020
Rate, per cent...
493, 020
575, 190
698, 445
821,700
6.0
Balance carried forward to next year..
6.0
7.0
8.5
186, 519
249, 019
548, 726
63,700
10.0
442, 255
41987°—16————15
226
GOVERNMENT AID TO MERCHANT SHIPPING.
TOYO KISEN KAISHA.
Items.
1909
1910
1911
1912
1913
Vessels:
Number.
Gross tonnage.
Capital:
Authorized..
Paid-up..
Reserve.
11
60, 793
12
70,099
9
77,113
11
71,952
13
88,223
$6,474,000
4,046, 250
$6,474,000
4,531,800
$6,474,000
4,531, 800
$6,474,000
4,531,800
$6,474,000
4,855, 500
105, 912
105, 912
284, 342
397, 616
447,556
Profit and loss account:
Receipts-
Operating revenues.
1,576, 108
Miscellaneous receipts…………
1,794, 044
2,224, 213
2,495, 333
2,821, 212
21,304
189, 695
21, 473
Subsidies
22,974
1,026, 169
1,260,362
1,491, 962
1,674, 765
Expenditures—
1,643, 763
Operating expenses.
2,601,044
2,688, 390
Miscellaneous..
3,359, 322
3,726, 925
4,091, 421
146,884
18,588
14,266
Net earnings..
a 124,346
537, 123
356,853
450,379
396, 528
Balance carried over from preceding
year.
Distribution:
b 403,235
b 530, 504
6,618
3,541
1,234
Reserve..
2,924
Bonuses
18, 426
Dividends-
22, 410
14,940
20, 418
Amount..
Rate, per cent..
341, 504
414, 336
1
Balance carried forward to next year..
7.5
10.0
373, 874
7.7
b 530, 504
6, 618
3,541
1,234
3,470
a Loss.
b Deficit.
A concise account of the development of the four leading Japanese
steamship lines is given in the following article prepared by a
"Japanese shipowner," which appeared in the December 23, 1915,
issue of Fairplay, pages 1073 and 1075:
The history of the subsidized liner companies is to all intents the annals of
the merchant marine of modern Japan, which started with a few small private-
owned vessels and now numbers a total fleet of over 2,000 steamers, with a gross
tonnage of more than one and a half million tons. The increase, naturally, at
first was gradual and tentative, while Japan was feeling her way through the
dark. Unlike Great Britain, she had not the stimulus of the rediscovery of
the compass and the added incentive of a new world. She had, however, the
spur of competition with established rivals and the security of a fixed interna-
tional financial system. The task before her did not lie in being a pioneer of
the unknown, but by her genius impressing upon those in possession of the
field her right to share in the fruits.
In 1873 the Japanese Government having decided to dispose of the entire
fleet of steamers which it had been acquiring since 1868, sold it to the Mitsu
Bishi Kaisha, then one of the largest steamship companies in the country, at the
same time financing the company, thus enabling it to acquire the Yokohama-
Shanghai service from the Pacific Mail Steamship Co. This wise act of the
Government resulted in the formation of the first Japanese line with regular
foreign sailings; and so great was the progress made that by 1876 the company's
fleet had increased to 42 steamers, of which 11 were of more than 1,000 tons,
which at that time was regarded as a fairly large-sized vessel.
Encouraged by the success of their first venture, and also, doubtless, with a
view to abolishing the commercial monopoly which the company was acquiring,
the Government produced a new State-aided rival under the name of the Kyoto
Unyu Kaisha (Union Transport Co.), which immediately entered into competi-
tion with such zest against its older rival that ultimately it was found that the
existence of the two concerns could not be assured without Government inter-
vention. Eventually an amalgamation took place, resulting in the inauguration
in 1885 of a new company, the Nippon Yusen Kaisha (Japan Mail Steamship
Co.) with a capital of 11,000,000 yen ($5,478,000). The combination proved
successful, and when, in 1894, 10 years after its inception, war broke out with
China, the company's fleet, practically the whole of which was requisitioned for
Government service, either as transports, armed cruisers, or hospital ships,
JAPAN.
227
numbered 57, with an aggregate tonnage of 130,000 tons. When peace was de-
clared the company's long-cherished dream of participating in the world's
trade was realized, and by 1896 regular services had been opened to Europe,
India, and the American States. Between 1894 and 1903, when the Russo-
Japanese war broke out and when once more nearly all the company's steamers,
which then numbered 71, with a tonnage of 252,000 tons, were placed at the
service of the Government, still further progress was made, and to-day the
company finds itself with a capital of 44,000,000 yen ($21,912,000), owning 94
steamers of 450,000 tons gross, and competing in every market of the world.
The uninterrupted progress of the second largest shipping company in Japan,
the Osaka Shoshen Kaisha, which was established in 1884, is no less notable.
Starting with a capital of only 1,200,000 yen ($597,600), for the purpose of
consolidating under one management numerous small shipowners, owning some
17,000 tons, which were ruining themselves and each other by reckless competi-
tion, by 1894 the company was able to find employment for a capital of 2,500,000
yen ($1,245,000), and simultaneously emerged from its insular tradition of
limiting itself to the inland seas, and opened up a service to Formosa, then an-
nexed to Japan, with new English-built steamers. In 1898 the company still
further extended its scope, and with a capital increased to 20,000,000
yen ($9,960,000), it plunged into the vortex of the world competition for the
Chinese market, and started a regular service on the Yangtsze River, and ulti-
mately along the South China coast. Noticeable success resulted from this
activity; the stage was rapidly reached when the Osaka Shoshen Kaisha felt
justified in regarding itself as competent to take its place as a recognized
member of the family of the world's shipping. Forthwith the first Hongkong-
Tacoma line was started (in 1909) with six good sized, up-to-date cargo boats; a
fortnightly service to Bombay was inaugurated in 1913. The company's capital
now reaches 24,750,000 yen ($12,325,500); it owns 120 steamers aggregating
278,000 tons, including those under construction, and it is freely rumored that
in a year or two its flag will be flying in European waters.
The success of the Nippon Yusen Kaisha and the Osaka Shosen Kaisha
naturally induced others to enter the lists, and in 1896 a new concern under
the name of Toyo Kisen Kaisha (Oriental Mail Steamship Co.) was launched,
with a capital of 7,050,000 yen ($3,510,900), for the purpose of transporting
passengers and cargo between Hongkong and San Francisco, via Japan, and by
the end of 1897 a service with three new steamers, of about 6,000 tons each,
was started. The supply did not prove equal to the demand, and in order to
cope with its requirements the capital of the company was doubled to 14,100,000
yen ($7,021,800) in 1905 In the same year it started yet another line to
South America. Its fleet was augmented by three other large passenger
steamers, of 13,400 tons each, in 1908, and at present it owns 10 steamers
with an aggregate tonnage of 87,000. The withdrawal, in October this year, of
the boats of the Pacific Mail Steamship Co., the oldest line on the Pacific,
while accentuating the scarcity of tonnage in the trade, gave to the concern
still further opportunities of reaping profits.
The mention of one other company flying the Japanese flag completes the
tally of the principal shipping enterprises of Japan. The Nisshin Kisen Kaisha
(Japan-China Steamship Co.) was formed in 1907 to consolidate the lines be-
longing to the Osaka Shosen Kaisha, the Nippon Yusen Kaisha, and two others,
created for the purpose of carrying on trade on the Yangtze River and its
tributaries in China. The amalgamation has accomplished what was expected
of it; it is a recognized keen competitor among the different European and
the native interests, and its capital is now 8,100,000 yen ($4,033,800), with
14 steamers, aggregating about 31,500 tons.
Chapter IX.-LATIN AMERICAN COUNTRIES.
ARGENTINA.
Among the merchant navies of Latin America that of Argentina
is exceeded in tonnage only by that of Brazil. Lloyd's Register for
1914-15 shows that the total net tonnage of ships of over 100 tons
in the Argentine merchant marine was 144,954. Of this total 112,-
165 was the total net tonnage of 244 steamships and 32,789 the total
tonnage of 69 sailing vessels. The merchant marine of Argentina
includes 16 steamships and 3 sailing vessels of more than 1,000 tons.
The operations of shipping under the Argentine flag are confined to
the Argentine coasting trade and to the trade with the other South
American countries.
The development of Argentine shipping has been steady and has
been due in no sense to any direct Government aid. A British report
on subsidies issued in 1913 states as follows:¹
No direct bounties have, as yet, been paid by the Argentine Government in
respect of shipping, but a law was passed by Congress in 1910 providing for
the payment of bounties on shipping under the Argentine flag and for subven-
tions to shipbuilding yards. The regulations issued in consequence of this law
lay down that, in order to be considered an Argentine vessel, it is necessary for
a ship (a) to fly the Argentine flag and be registered in the Republic; (b) to
have an Argentine proprietary title inscribed in the proper register; (c) to be
commanded by a master who is either a natural-born or naturalized Argentine
subject; and (d) to be manned by a crew, of whom at least one-third (in the
case of vessels of over 200 tons burden) or a proportion fixed by the Govern-
ment (in the case of vessels of under 200 tons burden) are Argentine citizens.
The last conditiou may, however, be provisionally relaxed by the Minister of
Marine in cases of proved necessity.
The regulations also provide that, in addition to the coasting trade, all tow-
ing, lighterage, and salvage operations are reserved to Argentine vessels.
Licenses granting postal packet privileges are issued to certain vessels, Argen-
tine or foreign. It is impossible to estimate the exact financial value of these
privileges, but their acquirement is a practical necessity for vessels sailing with
a fixed itinerary. The licenses are granted in return for the free conveyance of
the Argentine mails to Argentine or foreign ports.
BRAZIL.
The merchant marine of Brazil is the largest among the merchant
navies of South America, but it ranks only seventeenth among the
merchant navies of the world. The merchant shipping of Brazil has
been developed largely by means of liberal subsidies, and is dis-
tinguished by the fact that its most important company, the Lloyd
Brazileiro, is owned by the Brazilian Government.
The growth of Brazilian shipping has been comparatively slow,
despite the fact that subsidies have been granted liberally for many
years, at least since 1896. No official Brazilian statistics on shipping
are at hand, but the following data from Lloyd's Register shows the
net tonnage of steam and sailing vessels of over 100 tons in the Bra-
1 Great Britain: Report on Bounties and Subsidies in Respect of Shipbuilding, Ship-
ping, and Navigation in Foreign Countries, 1913, p. 2.
228
LATIN AMERICAN COUNTRIES.
229
zilian merchant marine in the years 1895, 1900, 1905, and in each year
from 1910 to 1914:
1895..
1900..
1905..
1910.
1911...
1912...
1913..
1914.
Year.
Actual net tonnage.
Total.
Sail.
Steam.
Potential
net
tonnage.a
107,324
33, 243
74,081
255, 486
115,379
29,580
85,799
286, 977
125.240
23,930
101, 310
327,860
161.599
18,395
143, 204
448,007
178.542
17,297
161,245
501, 032
192,051
14,443
177,608
547,267
204,866
16,221
188,645
582,156
201.442
16,322
185, 120
571, 682
a Computed on theory that 1 ton of steam tonnage equals 3 tons of sail tonnage.
Reservation of coasting trade. The coastwise trade of Brazil has
been reserved for ships of Brazilian registry since 1896, in which year
a liberal subvention was granted to the Lloyd Brazileiro for the op-
eration of coastwise services.
Construction bounties.-A Federal law of Brazil provides for a
bounty of 50 milreis ($16.62) per ton for steamships constructed in
Brazil, but so far as can be learned no payment has ever been made
under this law.¹
Subsidies.-As far back as 1864 the Brazilian Government began
the payment of subsidies to merchant shipping, but these payments
were made to an American line, the United States & Brazil Steamship
Co., to which for a period of 10 years the United States paid an annual
subsidy of $150,000 and Brazil $100,000. The policy of granting
subsidies to Brazilian shipping was not, however, instituted until
1896, when a subsidy of about £90,000 ($437,985) yearly was granted
to the Lloyd Brazileiro for the operation of regular coasting serv-
ices. This subsidy has since been increased and an additional subsidy
for the maintenance of regular service between Rio de Janeiro and
New York City has been granted.
The relations between the Lloyd Brazileiro and the Brazilian
Government have been close from the time of the organization of
this company. The Brazilian Government acquired all the capital
stock of the line late in 1913. Fairplay, in its issue of February 12,
1914, reported that the Brazilian Government was then offering for
sale the floating material, dry docks, work ships, buoys, and landed
properties" formerly belonging to the line." In its issue of April
23, 1914, Fairplay reported as follows: "The public sale of the boats
of the Lloyd Brazileiro is fixed for December next, the upset price
to be £2,927,575 ($14,247,044). During the allotted interval of four
months from the 11th of December, 1913, no offers to purchase were
received." The line has been operated since that time by the Bra-
zilian Government acting through the Bank of Brazil.
According to a British report 1 10 other Brazilian lines were receiv
ing subsidies in the year 1913. All were engaged in inland naviga-
tion and, with the exception of the Amazon Steam Navigation Co.,
were unimportant. This British report also calls attention to the
fact that up to 1913 no subsidies had been given to the Compania
1 Great Britain: Report on Bounties and Subsidies in 'Respect of Shipbuilding, Ship-
ping, and Navigation in Foreign Countries, 1913, pp. 9-10.
23.0
GOVERNMENT AID TO MERCHANT SHIPPING.
Commercio e Navegacao and the Compania Nacional de Navegacao
Costeira, which are next in importance to the Lloyd Brazileiro.
In September, 1912, the Brazilian Government entered into an
agreement with four Italian shipping companies, namely, La Veloce,
Lloyd Italiano, Italia, and Navigazione Generale Italiana, under
which the four companies were to establish jointly a mail steamship
line between Italy and Brazil, making two round voyages a month.
This agreement provided for a subvention of 27,500 lire ($5,308.50)
per voyage, or a total of 3,300,000 lire ($636,900) for the period of
five years for which the contract was made. Two-thirds of the sub-
vention is paid by the Brazilian Federal Government and one-third
by the State of Sao Paulo. It was stated that the purpose of the
contract is to provide for the emigration of Italian labor for work in
harvesting coffee.
The amount expended by the Brazilian Government for shipping
subsidies has increased steadily. A British report¹ states that sub-
sidies to shipping increased from about £135,000 ($656,978) in 1901
to £155,000 ($754,308) in 1905, to £219,400 ($1,067,710) in 1907, and
to £254,900 ($1,240,371) in 1911.
The following table, which was taken from the 1910 annual report
of the Ministry of Communications and Public Works, shows for
the year 1909 the number and gross tonnage of ships, number and
miles of voyages, and amount of subsidy received by the several
lines under the Brazilian flag:
Steamships.
Voyages.
Companies.
Num- Gross Num- Total
ber. tonnage. ber. miles.
Subsidies.
Term of Annual
contract. amount.
Years.
Lloyd Brazileiro.
Companhia Commercio e Navigacao..
55
Companhia Nacional de Navigacao Costeira…….
Companhia Navegacao Rio de Janeiro
Empreza Navegacao Joaquim Garcia & Co..
13532
79,485
26,386
405
997,387
a 16
$892, 327
123
365, 750
10
(b)
14.600
138
291.460
10
2,230
56
59,598
10
698
.44
43,763
10
(ბ)
Navegacao Sul-Rio de Janeiro..
5
12,977
Amazon Steam Navigation...
33
15,655
108
235,548
5
437, 122
Navegacao Tocantins e Araguaya.
1
155
12
4.686
9.733
Companhia Navegacao de Rio Parnahyba.
5
1.101
127
36, €20
5
38,932
Empreza Navegacao Baico San Francisco.
3
238
52
10.400
5
18,233
Empreza Navegacao Bahiana..
12
3,708
37
50.318
53,219
5 to 10
97,330
Empreza Viacao San Francisco.
11
274
60
€0,305
© 20
48, 665
Navegacao de Ibicuhy e Uruguay Barbara
Filhos..
Empreza Navegacao Espirito-Santo-Caravellas
Total..
22
95
8
2,980
1,400
24
44.526
000
10
19,466
10
(b)
157
147,025
1,194 2,203, 341
1,190, 882
a Terminates Mar. 31, 1922.
Not subsidized.
• Terminated Jan. 14, 1914.
CHILE.
The merchant marine of Chile is small. The total tonnage regis-
tered in Chile at the close of the year 1910 was 96,436 tons, the
steam tonnage amounting to 56,055 tons and the sailing tonnage to
40,381. Between 1901 and 1910 the steam tonnage increased nearly
26,000 tons and the sailing tonnage, nearly 4,000 tons. At the close
of the year 1910 the Chilean merchant marine comprised only two
steamships of more than 2,000 tons.
1 Great Britain: Report on Bounties and Subsidies in Respect of Shipbuilding, Ship-
ping, and Navigation in Foreign Countries, 1913, pp. 9-10.
1
LATIN AMERICAN COUNTRIES.
231
The Chilean Government has for a number of years extended direct
financial aid to both Chilean and foreign shipping. Subsidies or
bounties have been paid for the maintenance of regular steamship
communications, including the free carriage of the Chilean mail.
1
The principal beneficiary of the subsidy policy of Chile is the
Compañia Sud-Americana de Vapores, a Chilean steamship company.
A recent British report on subsidies states ¹ that in 1912 this com-
pany received amounts aggregating 183,000 pesos ($35,319), 125,000
pesos ($84,125) for the maintenance of regular steamship services
along the Pacific coast with a fortnightly service to Callao, Peru,
and Panama, 50,000 pesos ($9,650) for regular service in the Chiloe
Channel, and the balance for various local services on rivers and
lakes.
The Pacific Steam Navigation Co., which is one of the largest
companies operating under the British flag and is reported as doing
by far the largest shipping business in Chile, was for many years
the recipient of a postal subvention from the Chilean Government in
return for the maintenance of a fortnightly service between Liver-
pool, Valparaiso, and Callao. The company has renounced the sub-
vention, and in lieu thereof has received from the Chilean Govern-
ment valuable facilities for discharging cargo at the Government
wharf at Valparaiso.
The British report referred to above shows that the steamship
company Braun & Blanchard received subventions in the years 1907
to 1911, inclusive, for the maintenance of services between Valparaiso
and Talcahuano and Punta Arenas. This subvention amounted to
£4,444 ($21,627) in the years 1907 and 1908, to £8,382 ($40,796) in
1909, and to £8,889 ($43,307) in the years 1910 and 1911.
2
The following statement, taken from the British report on sub-
sidies, shows the total annual amount paid in subventions during
the years 1904 to 1910: 1904, $51,989; 1905, $56,023; 1906, $55,318;
1907, $72,428; 1908, $66,598; 1909, $152,360; 1910, $116,635.
GUATEMALA.
Guatemala has no merchant marine but relies wholly on foreign
shipping. Under a contract with the Pacific Mail Steamship Co.
made in 1897, the Government of Guatemala has paid that company
for the carriage of mail 2,000 pesos monthly. A recent report of our
diplomatic representative in Guatemala states that at the time the
agreement was made, the peso was worth about $0.40 in gold, but
that in 1912 it was worth only between $0.05 and $0.06 in gold.³
Under this contract the vessels of the Pacific Mail Co. operating on
the line between San Francisco and Panama are required to call
regularly at Champerico and San Jose de Guatemala, and occa-
sionally at Ocos.
MEXICO.
The Government of Mexico has pursued a liberal policy of sub-
sidies for a number of years, as is indicated in the following state-
ment, which shows the total subsidies paid in the fiscal years 1901–2,
4
1 Great Britain: Report on Bounties and Subsidies in Respect of Shipbuilding, Ship-
ping, and Navigation in Foreign Countries, 1913, p. 10.
2 Converted at the rate of $4.8665 to the pound sterling.
Investigation of Shipping Combinations. Vol. 3 of Report of Committee on the Mer-
chant Marine and Fisheries (1913), p. 277.
• Converted at the rate of $0.49% to the Mexican dollar.
232
GOVERNMENT AID TO MERCHANT SHIPPING.
to 1910-11: 1901-2, $70,831; 1902-3, $75,811; 1903-4, $66,774;
1904-5, $206,131; 1905-6, $174,757; 1906-7, $173,681; 1907-8,
$213,521; 1908-9, $212,628; 1909-10, $219,201; 1910-11, $269,001.
The subsidies have been paid almost entirely to foreign lines for
the maintenance of regular services between Mexico and the United
States, South America, and the Far East.
The merchant marine of Mexico is very small indeed. Lloyd's
Register for 1914-15 shows that the total net tonnage of ships of
over 100 tons under the Mexican flag was only 29,457 tons.
The principal beneficiaries of the subsidy policy of Mexico for
the fiscal year 1910-11 were the Pacific Mail Steamship Co., which
was granted a total of $114,731 for the maintenance of regular com-
munications between the Pacific coast ports of Mexico, Central
America, and the United States; the Toyo Kisen Kaisha, granted
$59,760 for services between ports in Japan and the Pacific coast
ports of Mexico; the Canadian-Mexican Atlantic Co., granted
$49,800 for services between the Atlantic coast ports of Canada and
the Gulf ports of Mexico; and the Southern Steamship & Importing
Co., granted $11,952 for service between Galveston and Frontera.
A total of $13,834 was paid to Mexican companies for the mainte-
nance of services on Mexican rivers.
In the fiscal year 1909-10 a subsidy of $99,600 was paid for the
maintenance of a regular service between the Canadian and Mexican
ports on the Atlantic and Pacific coasts. This grant appears to have
been reduced by one-half in the succeeding fiscal year and the ser-
vice restricted to a line between the Atlantic ports of Canada and the
Gulf ports of Mexico.
In addition to subsidies the Mexican Government granted a reduc-
tion of 50 per cent in the port charges and tonnage dues to a number
of steamship lines calling at Mexican ports upon the condition that
they should maintain regular sailings and should carry 10 tons of
the Mexican mails free of charge. The American consul at Tampico
reported on February 8, 1913, that "as a matter of fact little or
nothing is so carried, because they are not asked to do so by the
Government.” 1
2
PERU.
The only ship subsidy paid by the Peruvian Government is to the
Peruvian Steamship & Dry Dock Co. (La Compania Peruana de
Vapores y Dique del Callao). This subsidy, which amounts to about
30,000 libra ($14,600) per year, is based on article 5 of the law
governing the merchant marine, which reads as follows:
Steamships flying the national flag.shall receive as a subsidy from the Gov-
ernment 1 centavo ($0.004865) per register ton for each 100 miles traveled on
round voyage. In order to enjoy the subsidy it is necessary that the minimum
speed of the ship shall be 10 knots an hour.
The company also receives a drawback of customs duties paid on
ships' stores and equipment purchased abroad as well as an exemp-
tion from the payment of various shipping dues. In return for State
aid the steamship company agrees to carry mail free of charge and
to turn over its steamers to the Government for use as auxiliary
cruisers in time of war.
1 Investigation of Shipping Combinations.
chant Marine and Fisheries, 1913, p. 269.
Idem, p. 236.
Vol. 3 of Report of Committer on the Mer-
APPENDIXES.
Appendix A.-NORWAY: CONTRACT BETWEEN THE DEPARTMENT
OF PUBLIC WORKS AND G. M. BRYDE, FOR THE ESTABLISHMENT
OF A STEAMSHIP LINE BETWEEN NORWAY AND MEXICO, ETC.
[Report of the Commissioner of Navigation, 1909, pp. 244–246.]
ARTICLE 1. The shipowner, Mr. G. M. Bryde, hereby binds himself to main-
tain a 6-weekly route between Norway, Cuba, Mexico, and the ports of the
United States in the Gulf of Mexico.
ART. 2. The board of the steamship company shall have its seat in Norway
and be composed of Norwegian citizens.
ART. 3. The starting point of the route in Norway shall be Christiania;
vessels to call at some other town on the eastern or southeastern coast, accord-
ing to specified agreement with the department. Another port may also be
called at if no great delay is thereby incurred. Until further decision an Eng-
lish east coast port may be called at on the outgoing voyage for coaling, and a
continental port for completing the cargo. It is obligatory for the steamers to
call at the following foreign ports: Habana, Vera Cruz (and later on at Coatzo-
coalcos), and Galveston.
According to the decision of the owner, other ports in the Gulf of Mexico
may be called at for cargo, and on the return voyage some port in the Eastern
States for coaling.
On the return voyage a Norwegian coast town shall be called at for dis-
charging and loading purposes.
ART. 4. With a view to establishing the route, the owner binds himself to
furnish two vessels, the same to be approved by the department. Should it be
necessary to build these vessels, Norwegian workshops shall be employed by
preference, if no serious loss of time or higher expenses should thereby be
incurred.
The new vessels to be fitted out with suitable refrigerating compartments to
such an extent as may be stipulated by the department. The vessels shall be
kept in good order in every respect, and shall have able crews and be subjected
to the general provisions regarding vessels enjoying State subsidies. If either
of the vessels employed should be considered deficient in any material respect,
it must be replaced by another Norwegian vessel, with the approval of the
department.
Should any of the vessels employed suffer average or be prevented in other
ways from performing the service in the route, it should, as soon as possible,
be replaced by another suitable vessel.
ART. 5. The owner binds himself to forward goods, so far as it is practically
possible, on through bills of lading to inland places in Mexico and in the
United States, as well as by the Tehuantepec Railway to the western coast of
Mexico, to Central America, and Peru, if such should be requested by the
department.
ART. 6. Freights for forwarding goods and passengers shall be moderate
and subject to the department's control.
The freights to and from the ordinary calling ports in Norway shall be the
same for a fixed quantity of the same kind of goods.
Freight rates from the continental ports (vide art. 3) on such kinds of goods
as are also produced in Norway must not be lower than those fixed for for-
warding the same kind of goods from the calling ports of the route in Norway.
ART. 7. Parcel post and other mail shall be forwarded free of charge, if re-
quired by the postal administration.
ART. 8. If traveling on account of the State subsidy or of postal interests, the
officials of the department shall be forwarded free of charge; this also refers
to commercial stipendiates.
233
234
GOVERNMENT AID TO MERCHANT SHIPPING.
ART. 9. The route is fixed by the department on a plan submitted by the
owner, and the route once fixed must be adhered to with the greatest possible
exactness, to which purpose the owner has to see to the greatest possible fre-
quency of departures as well as quick dispatch in the calling ports.
ART. 10. The route. shall at all times be brought to the knowledge of the
public through advertisements in Norges Communicationer or another periodical
of traffic designated by the department.
The dates of departure from the different obligatory Norwegian, Cuban, Mexi-
can, or American ports shall be published by advertisement at least 10 days
in advance.
ART. 11. The owner shall, at intervals fixed by the department, give in to the
latter reports on the state of his accounts and the running of the route, as well
as all other information which might be desired. Itemized returns of goods
dispatched and received from all the different calling ports shall be sent in to
the department, if required.
ART. 12. The owner binds himself to refund such losses or expenses as might
fall upon public institutions or private shippers from causes for which the re-
sponsibility may devolve on him, be it in consequence of intentional acts or of
grave inadvertency on his part or on the part of his subordinates.
ART. 13. For the above-mentioned route there shall be granted to the owner
a yearly subsidy of up to 100,000 kroner ($26,800), payable in quarterly in-
stallments.
The State subsidy is granted to such an extent as the state of the accounts
seems to necessitate, namely, by contributions from the Government covering
within the limit of the above-mentioned amount, such difference as might arise
between the revenues and the expenses. As expenses have to be counted, all
and every expense necessitated by the running of the route; interests of loans,
as well as 5 per cent of the capital in shares actually paid down, and 7 per
cent of the original cost of the vessels (representing depreciation of same and
extraordinary repairs). All revenues count all income of any kind, the Norwe-
gian State subsidy alone excepted.
ART. 14. At the time when the present contract enters into force the owner
shall give over to the department a document issued by some well-known Nor-
wegian bank, by which the latter goes bail, as principal security, for the exact
fulfillment by the owner of ali obligations deriving from the contract up to an
amount of kroner 50,000 (vide art. 13).
ART. 15. If in any case the terms of this contract should not be fulfilled on
the part of the owner, the department may withdraw from the same at once.
In cases where the nonfulfillment should be of lesser importance the depart-
ment may impose a commensurate fine on the owner.
ART. 16. Differences of opinion as to the interpretation of this contract shall
be settled by arbitration by two men chosen, the one by the department, the
other by the owner, and, if the case should require it, by an umpire elected by
the two men.
•
Should the arbitrators not agree upon the election of the umpire, the latter
shall be appointed by the "Stiftamtmand" at Christiania.
ART. 17. The company shall commence its departures about the 15th August,
1907, and the contract will remain in force for three years after the inaugura-
tion of the route.
Appendix B.-FRANCE: LAW CONCERNING THE MERCHANT MARINE
OF APRIL 19, 1906.
[Journal Officiel, Apr. 20, 1906.]
The Senate and Chamber of Deputies have passed, and the President of the
Republic promulgates, the following law:
CHAPTER I. Construction bounties.-ART. 1. After the promulgation of this
law, there shall be granted to constructors of seagoing vessels of the mer-
chant marine allowances the rate of which shall be determined per ton of total
gross tonnage, as follows:
I. Iron or steel vessels: (a) Steamships, 145 francs; (b) sailing vessels, 95
francs. These bounties shall decrease annually by 4 francs 50 centimes (4.50
francs) for steamships and 3 francs for sailing vessels during the first 10
years of the application of the law; at the end of the tenth year they shali
remain fixed at 100 francs and 65 francs, respectively.
APPENDIXES.
235
II. Wooden vessels: (a) Vessels of 150 tons or over, 40 francs; (b) vessels
of less than 150 tons, 30 francs. Vessels the sides of which are of wooden
timbers exclusively shall be considered as wooden vessels.
Any alteration in a vessel resulting in an increase of tonnage entitles to a
bounty calculated in accordance with the foregoing rate on the increase in
tonnage.
The rate of the bounty to which a vessel is entitled is:
1. For a new vessel, that of the year of its registration, or, in the case
of a ship built for foreign account, of the year when it left France.
2. For an altered vessel, the bounty rate of the year in which it went into
commission for the first time after the completion of the work.
ART. 2. After the promulgation of this law the constructors of engines in-
tended for seagoing vessels of the merchant marine shall receive the following
allowances:
1. For engines and auxiliary apparatus, such as steam pumps, servo-motors,
dynamos, winches; blowers worked by machinery, put new on board vessels,
whether steam or sailing vessels; as well as for new steam boilers supplying
power, and their piping, 27 francs 50 centimes (27.50 francs) per 100 kilograms.
That bounty shall decrease annually by 0.75 franc during the first 10 years of
the application of the law; at the end of the tenth year is shall remain fixed at
20 francs.
2. For new parts of engines, which have undergone alterations or repairs,
as well as for engines, boilers, and auxiliary apparatus placed new on board
during the life of the vessel, 20 francs per 100 kilograms.
ART. 3. The right to seven-tenths of the bounties granted by the preceding
articles shall be acquired whenever the registration of the vessel has been
proved or, in the case of a ship built for foreign account, when it has left
France.
The remainder of the bounties shall be granted only to vessels flying the
French flag under the following conditions: Two-tenths at the expiration of
one year after French registration; one-tenth at the end of the second year.
However, in regard to wooden vessels, the right to the full bounty shall be
acquired as soon as a ship is registered or has left France.
In regard to alterations of vessels resulting in an increase of tonnage, and
to repairs mentioned in paragraph 2 of article 2, the right to the bounty shall
be acquired in full as soon as the vessel fits out for sea or the apparatus or
parts of apparatus have been placed on board the vessel.
The public treasury is definitely relieved from the payment of the fractions
of bounties not earned at the expiration of the terms fixed by this article.
CHAPTER II. Shipping bounties.-ART. 4. Seagoing vessels of French or for-
eign construction fitted out under the French flag for the over-seas or interna-
tional coasting trades which shall be registered in France after the promulga-
tion of this law, with the reservation in case of vessels built in foreign coun-
tries that they be less than two years old at the time of their registry, shall
receive as a shipping bounty an allowance per day in commission and per ton
of total gross tonnage, determined as follows:
1. Steamships: Four centimes (0.04 franc) per ton up to 3,000 tons; 3 cen-
times (0.03 franc) for each additional ton between 3,001 and 6,000 tons;
2 centimes (0.02 franc) for each ton above 6,001 tons.
2. Sailing vessels: Three centimes (0.03 franc) per ton up to 500 tons;
2 centimes (0.02 franc) for each additional ton between 501 and 1,000 tons ;
1 centime (0.01 franc) for each ton above 1,001 tons.
The shipping bounty shall only be granted to vessels whose total gross ton-
nage is at least 100 tons.
The provisions of paragraphs 2, 3, and 5 of article 5, of paragraphs b, c, d,
f, h, of article 6 of the law of April 7, 1902, are applicable to the shipping
bounty established by this article.
The shipping bounty shall be paid for each vessel placed under the régime
of this law until it reaches 12 years of age.
ART. 5. The right to the shipping bounty shall be acquired only by vessels
which give evidence, for each day in commission between the date of shipping
the crew and that of their discharge, of a minimum average run, as follows:
1. Ninety miles for steamships that have shown on trials, half laden, a speed
of 14 knots and over.
2. Eighty-five miles for steamships that have shown on trials, half laden, a
speed of 12 to 14 knots.
236
GOVERNMENT AID TO MERCHANT SHIPPING.
3. Sixty-five miles for steamships that have shown on trials, half laden, a
speed of 11 to 12 knots.
4. Fifty-five miles for steamships that have shown on trials, half laden, a
speed of 9 to 11 knots.
5. Thirty-five miles for sailing vessels.
The days during which a vessel has been stopped by unusual circumstances
(force majeure) will not be reckoned in estimating the average daily run
referred to above.
Moreover, in order to be entitled to the shipping bounty, vessels must give
evidence that they have carried, from the day of their sailing from a French
port until their return to a French port, a quantity of goods representing in
tons of freight at least one-third of their net tonnage over at least one-third of
the total run.,
The rate of the shipping bounty shall be reduced by 10 per cent in the case
'of vessels which will not have carried a quantity of merchandise representing
in freight tons at least one-half of their net tonnage over at least one-half of
their total run.
ART. 6. The rate of the bounty shall be reduced by 15 per cent for steam-
ships that have shown on trials, half laden, a speed under 10 knots, but equal
to or above 9 knots. No compensation is allowed for vessels that have a trial
speed below 9 knots.
The rate of the bounty shall be increased by: Ten per cent for vessels that
have shown on trials, half laden, a speed of at least 14 knots; 20 per cent for
vessels that have shown on trials, half laden, a speed of at least 15 knots; 30
per cent for vessels that have shown on trials, half laden, a speed of at least
16 knots.
CHAPTER III. Common and transitory provisions.—ART. 7. The construction
and shipping bounties granted by this law shall not be subject to the deductions
provided in articles 4 and 21 of the law of April 7, 1902.
Every year there shall be inserted in the budget of the Ministry of Marine
credits for sums equal to 6 per cent of the construction bounties and 11 per
cent of the shipping bounties provided for disbursement during the year, to be
applied as specified in articles 4 and 21 of the law of April 7, 1902.
Paragraph 3 of article 21 of the law of April 7, 1902, is hereby amended to
read as follows: One-third to the funds for disabled seamen, in order to grant
subsidies to chambers of commerce, to establishments of public utility, to insti-
tutions, establishments, or associations whose statutes are framed in con-
formity with the provisions of the law of July 1, 1901, relative to associations,
or of March 21, 1884, relative to syndicates, for the foundation or maintenance
in France or in certain foreign ports, principally those frequented by French
sailors, of sailors' homes or hospitals for the purpose of securing to them lodg-
ings, board, treatment, or employment, or of any other beneficial institutions,
and notably of sailors' training schools.
•
ART. 8. After the promulgation of this law, sailing vessels constructed under
the terms of the law of January 30, 1893, fulfilling the conditions required for
a right to the bounty and registered in France before November 1. 1901, shall
receive a shipping bounty of 3 centimes per gross ton and per day in com-
mission for a period of three years from the time they shall cease to benefit by
the law of January 30, 1893.
These vessels must furnish evidence that they have transported on at least
two-fifths of their voyages out and back a quantity of merchandise represent-
ing in freight tons at least two-thirds of their net tonnage.
ART. 9. Vessels which are now in commission under the French flag, those
which may be nationalized before the promulgation of this law, as well as
those which have been the subject of a declaration of priority in order to
benefit by the provisions of the law of April 7, 1902, shall remain subject to the
laws under the provisions of which they have been placed.
However, the owners of vessels which have been the object of a declaration
of priority (prise de rang), will have the privilege of renouncing the benefits of
that declaration and choosing the measures of this law. In regard to vessels
already registered under the French flag, that option will be effective only for
the shipping bounty and will confer no right to a new payment of the con-
struction bounty.
The option must be declared within two months after the promulgation of
this law.
The bounties earned by these vessels will be charged against the credits of
50,000,000 and 150,000,000 granted by the law of April 7, 1902, within the limits
APPENDIXES.
237
of the sums for which they were registered for beneficial priority at the date
of their option.
No declaration of priority with a view to the application of the law of April
7. 1902, may be made after the promulgation of this law.
ART. 10. Vessels to be built in accordance with contracts now in force for
subsidized postal service will be entitled to construction bounties of only 65
francs per ton and of 15 francs per 100 kilograms of engines, as granted by the
law of January 30, 1893.
If the steamship company should put into operation on one of the services
specified in said contracts now in force a vessel for which the bounties fixed
by articles 1 and 2 of this law have been paid, it will sustain during the entire
period of such operation a reduction of 66 per cent in the postal subsidy ap-
pertaining to the service performed by that vessel. The sums thus deducted
will be paid into the public treasury as reimbursement of the difference be-
tween the construction bounties paid for the vessel and those liquidated under
the law of January 30, 1893. The total amount of those deductions shall not
exceed the amount of that difference.
ART. 11. The construction bounties established by this law shall, with re-
spect to new vessels to be benefited by the shipping bounty, be paid to not more
than 50,000 gross tons of steamships and 15,000 gross tons of sailing vessels per
annum until the expiration of the law of April 7, 1902.
ART. 12. The benefit of the bounties established by this law is reserved: (1)
In the case of construction bounties to vessels whose hulls, engines, and boilers
have been constructed in France; (2) in the case of shipping bounties to ves-
sels whose home ports are situated in France.
Construction and shipping bounties may be allowed by the French colonies
out of local appropriations to vessels built in the colonies or having their home
port there.
Article 17 of the law of April 7, 1902, is hereby repealed.
Article 2 of the law of September 21, 1793, is also repealed in the case of
vessels with home ports in the colonies, in so far as the composition of their
crews is concerned, which will be fixed by an administrative regulation.
ART. 13. In the allowance of navigation and shipping bounties, the freight ton-
nage of the vessels carrying passengers, animals, or vehicles will be estimated
upon the following bases:
One ton and one-half for each passenger embarked or landed; 2 tons per head
for cattle, horses, and mules; one-half ton per head for small animals; 3 tons
per each carriage with two wheels; 4 tons per each carriage with more than
two wheels.
Travelers' baggage, including small provisions for the voyage, will not be
included in the computation of goods shipped or landed.
ART. 14. This law is to remain in force for 12 years.
ART. 15. Article 1, paragraph 2, of the law of January 30, 1893, is hereby
amended to read as follows:
Voyages made beyond the limits indicated below shall be considered as long
voyages in the over-seas trade (au long cours): To the south, the thirtieth
degree north latitude; to the north, the seventy-second degree north latitude; to
the west, the fifteenth degree longitude, Paris meridian; to the east, the forty-
fourth degree longitude, Paris meridian. However, Iceland, including its ter-
ritorial waters, is considered as coming within the limits of international
coasting trade.
In order to secure the benefits of the shipping bounties, vessels operating in
the international coasting trade shall be subject to the obligations imposed by
article 5 of the present law only within the limits determined by a regulation of
the public administration.
ART. 16. The provisions of the laws of January 30, 1893, and April 7, 1902, not
contrary to the provisions of the present law, shall remain in force.
ART. 17. A regulation of the public administration will determine the neces-
sary measures for the application of this law.
ART. 18. Violations of the rules relative to conditions of labor, safety, and
sanitation, when complained of by competent authorities, may result, accord-
ing to their gravity and frequency, in the reduction, by fractions of one or more
twentieths, of the shipping bounty or its total suppression.
These deductions may be made independently of any suit that may be insti-
tuted against the delinquents for infractions of the laws and regulations in
force.
238
GOVERNMENT AID TO MERCHANT SHIPPING.
ART. 19. Constructors will benefit by the bounty established by this law only
if the working force of the French workshops, factories, and yards contributing
to the construction of the vessel does not include over 10 per cent of foreign
workmen.
All the regulations relative to safety and sanitation to which French vessels
are subject shall be applicable to foreign vessels while in French ports.
Appendix C.-FRANCE: DECREE PRESCRIBING ADMINISTRATIVE
REGULATIONS FOR THE APPLICATION OF THE LAW OF APRIL
19, 1906, RELATING TO THE MERCHANT MARINE.
[Journal Officiel, Sept. 17, 1906, p. 6342.]
decrees:
The
The President of the French Republic
CHAPTER I. Determination of the age, register tonnage, speed, run, and cargo
tonnage of ships.—ART. 1. For the purposes of the law of April 19, 1906, the
age of a ship shall be reckoned from a date to be determined as follows:
1. Ships built in France and intended for the French merchant marine.
date is that of the first document of French registry. The delivery of the docu-
ment of registry, on the basis of which the rate of construction bounty is to be
determined, depends on the production of a certificate issued by the technical
commission organized under article 4 of the law of January 30, 1893, and acting
in conformity with the provisions of articles 56 and 57 of the decree of Sep-
tember 9, 1902. This certificate states specifically that, at the time of its
delivery, the ship is in a condition to undertake, by its own means, a regular
service for the transportation of merchandise or passengers, or as a fishing
vessel. It shows whether the ship is provided with propelling apparatus that
will enable it to perform such service without the aid of sails.
In the case of wooden sailing ships the certificate of the technical commission
need not be produced unless expressly demanded by the customs administration.
2. Ships built in France and intended for a foreign merchant marine. The
date is that of the permit for sailing. The delivery of the permit for sailing
is subject to the same conditions as the delivery of the document of registry.
3. Ships built abroad. The date is that of the first document preceding
French registry. In the absence of such a document the date is that of the
launching, as certified by the French consul at the place of construction. If
only the year of the launching be given in the certificate, the age of the ship
shall be reckoned from the first day of January of said year.
In the case of ships intended for the French merchant marine the date ascer-
tained in accord with the provisions of this article shall be recorded in the
document of French registry.
No matter what changes or increases may take place in the tonnage of a ship,
its age shall be determined by that date.
ART. 2. The provisions of articles 4 and 5 of the decree of September 9, 1902,
concerning the gross tonnage of ships, shall be applied in the determination
of construction and shipping bounties, established by the law of April 19, 1906.
ART. 3. For the purpose of applying the law of April 19, 1906, the speed of
a ship shall be ascertained on application by the owner or builder, in accord
with the provisions of articles 32 and 40 and 43 of the decree of September 9,
1902. The application shall be made within the following time limits:
1. For ships registered before the publication of these regulations: Within
a month after such publication.
2. For ships registered after the publication of these regulations: (a) For
ships built in France, within a month after the delivery of the first document
of registry. (b) For ships built abroad, within a month after the delivery, in
France, of the first document of registry.
If the application for testing the speed of a ship be not made within the
time limit as specified, such ship shall forfeit all rights to the shipping bounty
until the day when the application for speed test shall have been made.
In the case of ships which have left France before the publication of these
regulations, or which may leave within a month after such publication, without
having undergone the speed test, the owner shall apply for such test within
a month after the return of the ship to France and within a year, at the latest,
after its departure, unless prevented by a superior force. If the application
be not made within these time limits, the ship shall forfeit all rights to the
shipping bounty for the time during which it had been equipped prior to such
application.
APPENDIXES.
239
The results of speed trials undergone by a ship in a regular way before the
publication of these regulations shall be credited to such ship for the purpose
of obtaining the shipping bounty as provided by the law of April 19, 1906.
ART. 4. Articles 44 to 47 of the decree of September 9, 1902, relating to the
estimates of distances between ports, shall be applied in the calculation of the
runs prescribed by the law of April 19, 1906.
ART. 5. For the purpose of calculating the shipping bounty, the freight ton-
nage shall be determined in accordance with the provisions of the law of June
13, 1866, and of article 13 of the law of April 19, 1906.
CHAPTER II. Obligations relating to the postal service.—ART. 6. The pro-
visions of articles 48 to 53 of the decree of September 9, 1902, concerning the
obligations relating to the postal service, shall apply to ships receiving the
shipping bounty provided by the law of April 19, 1906.
ART. 7. Each navigation company engaged in subsidized postal service under
a contract in force after the promulgation of the law of April 19, 1906, shall
furnish to the Post Office Department, for each new ship employed in that
service, a certificate of the Department of Customs showing the particulars and
the rate of construction bounties allowed such ship.
If the certificate shows that the bounties provided by articles 1 and 2 of the
law of April 19, 1906, have been paid for any of those ships, the Post Office
Department shall deduct from the subsidy, and cover into the Treasury, the
sums specified in article 10 of that law.
Payments of postal subsidies to navigation companies mentioned in the first
paragraph of this article are to be based on a certificate of the Post Office De-
partment showing whether or not the provisions of the second paragraph of
article 10 of the law of April 19, 1906, have been applied in regard to the
services sharing in the subsidies, and what measures, if any, have been taken in
compliance with those provisions.
CHAPTER III. The right to construction and shipping bounties; how estab-
lished.-SEC. 1. Construction bounties.-ART. 8. Whenever a vessel is placed on
the stocks for the construction of which a bounty is to be asked the collector of
customs must be notified. Such notice shall state the name of the builder, the
shipyard where the hull is to be built, the name of the ship, its expected gross
tonnage, and an approximate date when the application for French registry
will be made.
In the case of ships on the stocks at the time of the promulgation of this
decree the notice shall be given within a month after such promulgation.
The customs officials shall ascertain when the vessel was placed on the stocks.
ART. 9. The right to construction bounties provided by articles 1 and 2 of the
law of April 19, 1906, for seagoing ships of the merchant marine is to be
established under the conditions specified in articles 54 and 57 and 60 of the
decree of September 9, 1902.
In the case of an increase in the tonnage of a ship, repairs of engines, or
renovation of boilers and auxiliary apparatus, there shall be produced, in addi-
tion to the documents enumerated in that decree, a certificate of the collector
of customs showing the rate of the construction bounty allowed the ship for the
hull, engines, boilers, and apparatus of the original equipment.
ART. 10. The builder of an iron or steel ship flying the French flag which has
been wrecked during a voyage before the expiration of the term entitling him
to the last three-tenths of the construction bounty under article 3 of the law
of April 19, 1906, shall be entitled to a part of the tenths he was about to
acquire proportionate to the number of days which have elapsed from the day
of registration, or from the end of the first year after registration, to the day
of the wreck.
When the date of the disappearance of the ship is unknown, but it is still
possible to ascertain the place where the ship was wrecked, the supplementary
bounty shall be calculated with a regard to the number of days necessary for
the ship to cover the distance between its last port of call and the scene of the
wreck at the rate of speed the ship had shown in the official test.
If the location of the wreck is unknown the ship shall be considered to have
completed one-half of the voyage from its last port of call to its next declared
stopping place.
ART. 11. The construction bounty shall be paid upon the production of the
documents indicated in article 58 of the decree of September 9, 1902.
In addition, there is to be produced, for ships whose hulls have been rebuilt,
a certificate of the collector of customs of the port of construction showing the
240
GOVERNMENT AID TO MERCHANT SHIPPING.
¿
date of the reequipment of the ship, in accordance with paragraph 4 of article 3
of the law of April 19, 1906.
ART. 12. The documents here required are to be sent by the builder to the
collector of customs at the port of construction or repair.
The collector draws up a schedule for the payment of the bounty; the sched-
ule is then sent, with the other documents, to the director general of customs for
verification and signature.
The supplementary payments of the tenths retained under article 3 of the
law of April 19, 1906, will be made on application of the builders, accompanied
by a declaration to the effect that the ship always flies the French flag. Such
declaration, accompanied by proper proofs, shall be submitted to the collector
of customs of the home port, who shall sign it, making a note of the proofs
produced.
ART. 13. When the tonnage of ships which might claim the bounties limited
by article 11 of the law of April 19, 1906, exceeds in any one year the maximum
specified in that article the part of the tonnage which is to receive the bounty
paid at the rate of that year shall be determined according to the chronological
order of the documents of registration. For that purpose a receipt showing the
day and hour of the delivery of each of those documents shall be sent by the
shipowner to the collector of customs, who shall forward it to the director
general of customs.
The construction bounties applying to the remainder of such excessive ton-
nage shall be carried over to the following year and made a first charge, before
all others, upon the credit open for that year, and paid at the rate of that year.
When the tonnage of the last ship on the list in any one year exceeds the
remainder within the maximum limit, the bounty corresponding to such excess
shall be carried over to the following year. The bounty applying to the
machinery of such ship shall be divided between the two annual periods in the
same proportion as the tonnage bounty.
ART. 14. The Minister of Finance shall publish each month in the Journal
Officiel a list of new ships which may be entitled to the construction bounty and
the shipping bounty within the limits established by article 11 of the law of
April 19, 1906, showing the tonnage of ships for which a declaration has been
made of their being placed on the stocks, as well as of the ships registered dur-
ing the same annual period.
SEC. 2. Shipping bounty.—ART. 15. The right to the shipping bounty provided
by the law of April 19, 1906, shall be established in accordance with the rules
prescribed by articles 61 to 72 of the decree of September 9, 1902, for the
shipping bounty provided by the law of April 7, 1902.
In order to establish the right to the shipping bounty acquired during the
first two years following the registration of ships which have received the con-
struction bounties provided by the law of April 19, 1906, there shall be pro-
duced, in addition to the documents required by the above-mentioned articles, a
certificate showing that the notice prescribed by article 8 of this decree has
been given.
ART. 16. Payment of the shipping bounties shall be made upon the production
of the documents enumerated in article 74 of the decree of September 9, 1902.
The certificate of lading (certificat de chargement) required by that decree to
be drawn up by the collector of customs on the basis of the register of voyages
(registre des traversées) and other papers of the ship, must show that the
quantity of merchandise transported by the ship represents, in freight tonnage,
at least one-half of its net register tonnage carried over one-half, at least, of
the total distance covered, or to be covered, by the ship between its departure
from a French port and its return to a French port, or, where this condition is
not fulfilled, at least one-third of its net tonnage carried over at least one-
third of its run.
In addition, there shall be produced a certificate, to be drawn up by the ad-
ministrator of the maritime inscription, showing that the mean run for each
day the ship is in commission has been at least equal to the number of miles
specified in article 5 of the law of April 19, 1906, or in article 17 of this decree,
for ships of the class to which it belongs. The certificate must likewise show,
on the basis of the ship's papers, the time, if any, when the ship was stopped
by unusual circumstances (force majeure).
ART. 17. The minimum run per day of service, as prescribed by article 5 of
the law of April 19, 1906, is hereby reduced by two-fifths for voyages within the
limits of the international coasting trade as established by article 15 of said
law.
APPENDIXES.
241
That minimum is hereby reduced by three-fifths for those ships which have
not in the course of a period of service gone beyond the twelfth degree of longi-
tude east of the Paris meridian.
ART. 18. The documents required are to be sent by the shipowner to the
administrator of the maritime inscription of the port of registry, and the
administrator shall prepare a schedule and forward same with the other docu-
ments to the Minister of Marine.
SEC. 3. Provisions relating to both construction and shipping bounties.-Art.
19. The schedules of bounties having been established, that for construction by
the Minister of Finance, and that for shipping by the Minister of Marine, the
documents are sent to the Minister of Commerce, who is charged with ordering
the payment.
ART. 20. The orders for payment are to be charged to the annual budgets, as
follows:
1. For construction bounties, according to the year when the right to the
bounty has been acquired under the provisions of article 3 of the law of April 19,
1906, and the reservations made in article 13 of this decree.
2. For shipping bounties, according to the year during which the ship re-
turned to France; or, in case of partial payments, according to the year when
the partial voyage terminates.
CHAPTER IV. Subsidies to institutions maintained for the benefit of sailors.—
ART. 21. The provisions of articles 80 to 85 of the decree of September 9, 1902,
relating to the distribution of the sums deducted from the construction, naviga-
tion, and shipping bounties shall apply to the distribution of the annual credits
which are to be inserted in the budget of the Ministry of Marine as provided by
article 7 of the law of April 19, 1906.
However, the second and third paragraphs of article 83 are hereby amended
to read as follows:
"Application for subsidies submitted by chambers of commerce are to be
examined by the Minister of Commerce; those presented by establishments, in-
stitutions, or societies mentioned in article 7 of the law of April 19, 1906, are to
be examined by the Minister of Marine, acting in concert with the minister in
whose jurisdiction such establishments, institutions, or societies are included.
If the institution on behalf of which a subsidy is asked is to be located in a
foreign country or a colony, the investigation is to be undertaken in concert
with the Minister of Foreign Affairs or the Minister of the Colonies.
For the purpose of investigating such applications a commission is hereby
created, the Ministry of Marine, the Ministry of Commerce, and the other de-
partments participating in the investigation being each represented by two
members. The members of the commission are to be appointed by the Minister
of Marine, on recommendation of each of the ministers interested."
CHAPTER V. Common and transitory provisions.—ART. 22. Ships for which a
choice has been declared under the conditions of article 9 of the law of April
19, 1906, shall remain enrolled upon the registers mentioned in Chapter II of
the decree of September 9, 1902, in the order and position which they occupied
at the time of the promulgation of this law.
Construction bounties earned by these ships under the law of April 19, 1906,
shall be charged against the credit of 50 millions granted by the law of April
7, 1902, up to the sum for which they were registered.
Shipping bounties earned by these ships under the law of April 19, 1906, shall
be charged against the credit of 150 millions granted by the law of April 7,
1902, up to the sum for which they were registered in the list of beneficiaries.
Ships not registered in the list of beneficiaries preserve their right to allow-
ances provided by the law of April 7, 1902, for the period preceding the promul-
gation of the law of April 19, 1906, for which eventual liquidations have been
established.
The presumable expenditure on behalf of the ships referred to in the preced-
ing paragraph shall be reduced to a figure corresponding to the period for which
they can be entered as beneficiaries.
ART. 23. In addition to the documents required by article 20 of this decree in
accordance with the decree of September 9, 1902, for the liquidation of shipping
bounties, there shall be produced for sailing vessels admitted to the benefits of
the law of April 19, 1906, under article 8 of that law, a cargo certificate (cer-
tificat de chargement) prepared by the collector of customs on the basis of the
register of voyages and other papers of the ship showing that the vessel has
carried a quantity of merchandise representing in freight tonrage at least two-
41987°—16———————16
242
GOVERNMENT AID TO MERCHANT SHIPPING.
thirds of its net register tonnage over two-fifths, at least, of its run between
its departure from a French port and its return to a French port.
However, partial payments may be made before the return of the vessel to
France, if it shall be proved by a certificate drawn up in the same form that
the condition indicated above will be fulfilled by the complete voyage, even if
the vessel should return in ballast.
ART. 24. Articles 8, 13, and 14, and the last paragraph of article 15 of these
regulations shall cease to be in effect after April 7, 1912.
ART. 25. The Ministers of Commerce, of Industry and Labor, of Marine, of
Finances, of Public Works, of Posts and Telegraphs, and of the Colonies are
hereby charged, each in matters relating to his department, with the execution
of this decree, which shall be published in the Journal Officiel of the French
Republic and inserted in the Bulletin des Lois.
Appendix D.-FRANCE: CONTRACT OF THE COMPAGNIE DES MES-
SAGERIES MARITIMES OF DECEMBER 30, 1911.
ART. 6. The Government renounces the right to subsidize any lines parallel
to that of the company.
The company is required to furnish the sum of 3,000,000 francs as a guar-
anty of faithful performance.
ART. 8. No special number of vessels is stipulated, but enough to assure
regularity of service will be required. New vessels must be superior in dimen-
sions, tonnage, and engine power to the present ones.
Certain tonnages and displacements are indicated for vessels carrying on
the service. Minimum tonnages prescribed: Lines of China, Australia, and
Tonkin, 11,000 tons; lines of Indian Ocean and the Mediterranean, 7,500 tons;
branch line from Colombo to Calcutta, 3,000 tons.
The above figures are only indicative, and the company should adjust future
construction to the needs of the service and facts developed by experience.
but the displacement of new vessels when loaded must not be less than that
shown by the following figures: Lines of China, Australia, and Tonkin, 15,000
metric tons; lines of the Indian Ocean and the Mediterranean, 10,000 metric
tons; branch line from Colombo to Calcutta, 3,000 metric tons.
ART. 10. Vessels are to be property of company and must have been built in
France.
Construction of new vessels must be so arranged that their average age six
years after these provisions have gone into effect will be less than 12 years.
ART. 13. All equipment must be equal to that of the best French liners.
ART. 15. The administration reserves the right to supervise the construction
of new vessels of the company.
ART. 16. The company is required to communicate to the minister of marine
all plans for each new vessel's accommodations, so that he may make changes
necessary to fit the vessel for war service.
ARTS. 17 AND 18. A vessel before acceptance must undergo thorough exam-
ination by a special commission.
ART. 20. If the company is obliged to withdraw certain vessels from service,
it may substitute until November 30, 1916, vessels not forming part of its
present fleet, provided their minimum displacement is 9,000 tons for the lines
of Indo-China and Australia, and 6,000 for those of the Indian Ocean and the
Mediterranean, and that they conform to speed conditions required by these
specifications and that their accommodations are accepted by the administration.
ART. 21. Fuel supply to consist exclusively of coal of French origin.
ART. 22. Except in case of emergency all changes and extensive repairs to be
made in French workshops.
ART. 23. In case of loss of vessel the company is not allowed to interrupt
service on plea of force majeure, but may place temporarily in postal service a
vessel not conforming entirely to specifications. A maximum period of two years
is granted for use of such substitute, after which a vessel fully conforming to
specifications must be provided.
ART. 24. Strength and personnel of crew are to be fixed by Minister on recom-
mendation of Minister of Marine.
ART. 27. Annual averages of speed fixed for the various lines are as follows:
Marseille-Saigon, 15 knots; Saigon-Yokohama, 14 knots; Marseille-Haiphong, 13
knots; Colombo-Calcutta, 12 knots; Australia-New Caledonia, 10 knots; Mar-
seille-Reunion and Mauritius, 13 knots; Marseille-Alexandria, 14 knots; Mar-
APPENDIXES.
243
seille-Constantinople, 14 knots; other Mediterranean routes, except along the
Syrian coast, where minimum speed may be reduced to 12 knots, 13 knots.
Passage through Suez Canal is not an element in calculation of minimum
speed.
If, as a result of increase of speed of competing lines, greater speed for this
line is deemed necessary, the administration may require such speed for liners
to be built and placed in the service, but it must be through agreement with the
company and approval of Parliament. If on account of increase in speed there
is reason for increase in subsidy it is fixed by agreement between the Govern-
ment and the company, or, if this fails, by arbitration.
ART. 28. The Minister fixes, on proposition of the company and with regard
to exigencies of the service, the itinerary of vessels. Certain variations there-
from are permitted if it appears that they do not injure the service.
ART. 29. Departure from France may not take place before arrival of dis-
patches from Paris. The delay must not exceed 12 hours without the company's
consent. No indemnity is allowed for the delay.
ART. 30. In case of emergency certain Government officials may, on specified
conditions, delay departure of vessels.
ART. 31. Any omission of a port of call on account of force majeure must be
verified by an official report.
POSTAL SERVICE.
ART. 32. The company obligates itself to transport gratis, without weight
limit, any packages delivered to it by the Post Office Department, as well as
embassy mail bags from the Minister of Foreign Affairs.
ART. 33. The company must bear the responsibility and expense of taking
mail from office (including transportation of Government's agent, if one is
deemed necessary), delivering it at post offices and stations, and must pay all
incidental expenses. The company must pay charges arising from quarantine
measures.
ARTS. 34, 35, and 36. Details of delivery, supply, and repair of mail sacks and
placing of mail boxes are regulated.
ART. 37. The administration reserves the right to place on each vessel an
agent having complete control over receipt and transmission of mails.
ART. 38. Provision is made for lodging of the agent and details regarding
cabin reserved for mail.
ARTS. 39 and 40. A small boat is placed at the disposal of the agent, but only
for exigencies of the service. The company is bound to furnish him the services
of a sailor for necessary rough work.
ART. 42. If the voyage, for any cause, is interrupted, the Government rep-
resentative is authorized, after agreement with a representative of the com-
pany, to forward the mail at the company's expense, by the first French liner.
ART. 44. Mail to be received is limited to that transmitted by French Post
Office Department and diplomatic or consular authorities. Ship's papers and
company's correspondence are to be kept by the captain under separate cover,
subject to the right of the Government representative to examine them in case
he has reason to suspect fraud.
ART. 45. With the exception noted in the preceding paragraph, ship officers
and crew and their servants, as well as passengers, are forbidden to have charge
of any letters or manuscript.
ART. 46. The company is required to cooperate in the transportation of parcels
post and is held to the obligations and benefits for the Government from the
conventions of the Universal Postal Union.
WIRELESS TELEGRAPHY.
ART. 47. The company obligates itself to install wireless telegraph apparatus
on board when so ordered by the administration, with previous approval of
the Administration of Posts and Telegraphs, which reserves right to provide
that the apparatus be made in France of materials furnished by manufacturers
having their shops in France. Wireless stations on board must be capable of
exchanging communications with coast stations at average distance of 300 kilo-
meters. The Administrations of Posts and Telegraphs reserves the right to
order changes in the apparatus at the expense of the company when develop-
ments in radiotelegraphy show that improvements should be made.
244
GOVERNMENT AID TO MERCHANT SHIPPING.
ART. 48. Provision is made for approval by Administration of Posts and Tele-
graphs of all contracts, etc., between the company and constructors of wireless
telegraph apparatus before such agreements become effective.
ART. 49. Period allowed for installation and putting in operation is fixed by
agreement between the company and the Administration of Posts and Tele-
graphs. The latter may, if no agreement is reached, require installation within
six months of a date arbitrarily fixed by the administration under penalty of 50
francs a day if the apparatus is not ready for operation on expiration of the six
months.
ART. 50. Rates on messages to be collected for benefit of station are to be fixed
by the Administration of Posts and Telegraphs, based on agreement with com-
pany. No charge is to be made for French official messages. Provision is made
for free retransmission of radiotelegrams from French coast stations to vessel
and vice versa.
ART. 51. Telegraph operators are to be French citizens unless otherwise spe-
cially authorized.
ARTS. 52 and 53. Provision is made for secrecy of messages and right of super-
vision by the administration.
ART. 55. With certain specified exceptions, the administration guarantees to
the company nine-tenths of the transportation of its personnel and all of the
transportation of Government material.
ART. 57. Reduction is to be made on fare of officials or bursars, their families,
and their domestics, traveling at expense of Government of France or her colo-
nies. Reduction, applying to transportation and meals, is to be 25 per cent, or
35 per cent for lower-deck passengers.
If a port of call can be served either directly by one of the lines of the com-
pany or by transshipment to a branch line, the fare charged for the indirect
passage must not exceed that for the direct one.
ART. 58. The company must reserve a certain proportion of places for Govern-
ment troops or other Government passengers on vessels preparing for departure,
the proportion being reduced after a specified day prior to the vessel's departure.
The proportions and dates vary for the different lines, according to detailed
regulations.
ART. 59. In case the Compagnie des Chargeurs Reunis discontinues service
between the metropolis and Indo-China, same shall be carried on by the Com-
pagnie des Messageries Maritimes on six months' notice. Allowance for such
service can not exceed 0.97 francs ($0.187) per 1,000 miles per ton of the total
gross tonnage of each vessel in the service. The maximum figure on which the
calculation is based is 7,000 tons for the distance from Marseille to Haiphong
and return.
The right is reserved by Government to require on January 1, 1916, sub-
stitution, for so-called commercial service, of a second line of vessels between
Marseille and Haiphong identical to the monthly service under discussion.
ART. 61. Details are given relative to conditions of transporting Government
passengers. If the company can not transport such passenger in the class
designated by the requisition, the fare allowed the company is for the kind of
transportation actually furnished, but not for the kind of food specified in the
requisition.
ART. 62. The provisions of the decree of September 22, 1891, relative to the
repatriation of sailors of the merchant marine are obligatory for the com-
pany's vessels.
ART. 63. The company obligates itself to transport on requisition the bodies
of soldiers, sailors, or officials who have died abroad or in the colonies at 50
per cent of first-class fare.
ART. 64. Conditions are specified as to the company's obligation to transport
invalids, insane persons, and criminals on Government requisition. For trans-
portation of insane persons, double the fare of the class specified in the
requisition is paid, if the passengers are of the kind to whom article 57 ap-
plies; otherwise double the regular fare of other passengers of the same class.
For invalids the fare is the regular one for passengers of the class specified
in the requisition, unless special accommodations are necessary, when double
this fare is charged.
ART. 65. The company is required to reserve up to 10 days before sailing one-
tenth of its cargo capacity for materials, provisions, and animals destined for
use of the Government or the colonies. After the tenth day prior to sailing
the places not retained by the Government may be sold.
APPENDIXES.
245
Transportation of material of the Colonial Department is effected on condi-
tions agreed to by that department and the company and approved by the
Minister of Finance. For other departments the rate is 30 per cent less than
the commercial tariff.
For inflammable materials, double freight rates must be paid; for explosives,
regular commercial rates for such substances. One clause secures to the Gov-
ernment the same rates as those enjoyed by most favored shippers.
ABT. 66. Reduction of 30 per cent is made on excess baggage charges in the
case of passengers traveling on Government requisition.
ART. 67. Free transportation is required in the case of specie or bullion for the
home Government or the colonial governments. When the Government sends
special agent to accompany such shipment, his transportation (but not meals)
is furnished gratis. The company must conform to his instructions relative to
loading, unloading, and stowing such shipments.
TRANSPORTATION ON CONCESSIONARY'S ACCOUNT.
ART. 68. The company can for its own profit transport passengers and goods,
fixing its own rates for such services. Passengers are to have food and ac-
commodations equal to those on best French and foreign lines. Invalids are
entitled to food prescribed by physician. The earnings from transportation of
mail belong to the Administration of Posts and Telegraphs except the remunera-
tion due the company for carriage of parcels post.
ART. 69. At any regular port of call the company must accept, within the
limits of space then available, goods presented by a French shipper for any
other regular port of call. Preference must be given, under similar conditions,
to French shipments. Imports, reexported, must not receive a lower rate on
subsidized vessels than that applied to similar goods originating in France,
carried on same vessel for same destination.
ART. 70. The company is forbidden to engage in commercial operations (specu-
lation?).
ART. 71. The company is required to comply with sanitary and customs
regulations at ports.
ART. 72. Provision is made for the placing of merchandise in the most advan-
tageous way.
ART. 73. The company must keep the departments concerned posted on its
rates for passengers, freight, and meals, and make a report to the Minister each
quarter of the results of the traffic with respect of transportation of passengers
and freight.
ART. 74. Supervision of the company's service is exercised in the name of the
Minister of Public Works and of Posts and Telegraphs by the Government
commissioners or their agents at headquarters or ports of call and by the in-
spector of maritime postal service at sea. The commissioners have supervision
over all operations of the company even on lines not subsidized. They do
not take part in the management of its business, but the company is obliged to
furnish any information or documents the commissioners require. Each ad-
ministration, however, reserves the right to assure and to superintend directly
the execution of transportation service and, in a general way, to administer
its own interests with respect to the company.
The Government also reserves the right to place a commissioner at the head-
quarters of the company. He may also be charged by the various administra-
tions concerned to represent them with the company especially for the solution
in the public interest of all questions relating to the execution or modification
of the services.
ART. 75. Provisions are made for Government inspection of vessels and mate-
rial at any time.
ART. 76. Method of such inspection is specified.
ART. 77. Log books are at any time subject to inspection by Government
delegates, their agents, and inspectors of maritime postal service.
ART. 78. Provision is made for care of claims book.
ART. 79. Provision is made for posting in the company's offices and on vessels
particulars of itinerary passenger rates and maximum passenger capacity.
PENALTIES.
ART. 80. Except in duly attested cases of force majeure or where vessels have
been temporarily detained by competent authority, any delay in the departure
246
GOVERNMENT AID TO MERCHANT SHIPPING.
of vessels from terminal ports or intermediate ports where the time of de-
parture is stipulated renders the company liable to a fine of 50 francs ($9.65)
an hour or fraction of an hour. After 12 consecutive hours of unjustified delay,
the fine may be raised to 100 francs ($19.30) for each subsequent hour. Similar
penalties are imposed for delay in arrival. Additional delays are allowed on the
oriental lines during monsoons. Independently of these penalties, when the de-
lay exceeds 24 hours, the minister, with the consent of the company, may, in
concert with the local authorities, take the necessary measures to assure con-
tinuance of the mail service, even hiring a vessel or requisitioning a vessel
covered by the contract, and all resulting expenses are charged to the company.
A strike is never considered legally as a case of force majeure.
ART. 81. For each regular port of call not served, except in case of force
majeure, the company is liable to a fine of 2,000 francs ($386); the service
may be assured on the conditions provided in article 106 without prejudice of
penalties incurred.
ART. 82. With the exceptions provided for by articles 20 and 23, the use of
vessels not admitted for the postal service, entails for the company the loss of
the portion of the subsidy due for the voyage performed, unless use of such
vessel was authorized by the minister.
ART 83. If a vessel is lost and the substitution prescribed by article 23 does
not take place in the period fixed, the company, except for unforeseen circum-
stances of which the company is judge, is amenable to a fine of 1,000 francs
($193) for each days' delay.
ART. 84. Every delay and every act of negligence in handling the mails, is
punishable by a fine of from 100 francs ($19.30) to 500 francs ($96.50) without
prejudice as to responsibility incurred by the company in case of loss or damages
caused through its fault. Any infraction of regulations for which no special
penalty is provided, renders the company liable to fines not less than 25 francs
($4.825) nor more than 500 francs ($96.50).
ART. 85. Except in case of force majeure, a fine is imposed for each failure to
attain the minimum average speed prescribed for a year. If the speed is one-
fourth of a knot less than this minimum, the fine is 5 per cent of the subsidy
due for voyages made by each vessel falling below such minimum, with an in-
crease of 5 per cent for each additional quarter of a knot by which the speed
attained falls below the prescribed minimum.
ART. 86. The manner of determining the average speed is prescribed. By way
of exceptions the penalties provided in the preceding article do not become ap-
plicable to the line of the Indian Ocean during the first three years of operation
unless the average annual speed of the vessels of the line is less than 123 knots.
After this period they apply, if said speed is less than 13 knots. Injuries to the
engine, other than breakage of shafts or loss of screw, are not considered cases
of force majeure except when it is shown that the injury could neither have
been foreseen nor avoided. Any vessel must be replaced if its average speed was
as much as 1 knot less during the preceding year than the obligatory speed
on the line to which the vessel is assigned. A period of two years is allowed
for making the substitutions. The rejected vessels may, however, be restored to
the mail fleet, after modification and official trial trips.
ART. 87. Except is case of force majeure total or partial failure to accom-
plish a voyage entails suspension of that part of the subsidy corresponding
to the portion of the voyage not accomplished, without prejudice as to a fine
of 500 francs ($96.50). If the mail has been dispatched to destination with-
out the hiring of a vessel, and if the expenses of forwarding were paid by
the company, the amount of such payment is deducted from the amount of
the suspension to apply to the subsidy.
ART. 88. A voyage unavoidably interrupted is considered as accomplished
and no deduction from subsidy is made in such case, but the expense of for-
warding the mail is chargeable to the company.
ART. 89. If the service is not in full operation on the initial date stipulated
in article 4 the company is liable to a fine of 500 francs ($96.50) a day for
each line not wholly or partly served. If failure to carry on service extends
beyond two months the minister has the right to cancel the contract, in which
case the guaranty deposit is required by the treasury. If the company fails
to replace vessels often enough to satisfy requirements of article 10 relative
to average age of gross tonnage of the mail fleet, it is subject to a fine, begin-
ning either with the sixth year of the contract or later, when the prescribed
average age was exceeded, and extending to the time when the average age is
reduced to the necessary figure by putting new vessels into service. This fine
APPENDIXES.
247
is collected by a monthly suspension of 2 per cent of the subsidy earned during
the last preceding contractual year, by any line where the new vessels were
necessary to reduce the average age of the fleet's tonnage below the maximum
age prescribed in article 10.
ART. 90. Various reasons which may be sufficient for cancellation of contract
or putting it in charge of trustees are specified. Aside from irregularities of
service some of the most important are: Subletting contract; unauthorized
treaty with foreign Government; failure to renew guaranty deposit; use of
vessels not company's property on subsidized lines; maintenance in service of
vessels not answering to specifications; bankruptcy or judicial liquidation. In
the latter case the minister may accept offers by the company or its creditors
for continuation of service.
ART. 91. When a contract is turned over to trustees the minister maintains
the service by means which he considers suitable at the risk and expense of
the company. The same applies to cases of cancellation, but only during the
maximum period of one year.
ART. 92. The method of applying penalties is prescribed.
ART. 93. The manner of applying fines and suspensions of subsidies earned is
prescribed.
ART. 94. The vessels assigned to transportation of mail can not share in the
navigation premiums nor the shipper's bounties resulting from the laws of
April 7, 1902, and April 19, 1906. Exception is made of vessels assigned to
service between Marseille and Noumea via Batavia. They receive the naviga-
tion premiums to which they are entitled under law of 1902.
ART. 95. The method of calculating suspensions is prescribed.
ART. 96. The formalities to be observed in payment of the subsidy and reim-
bursement of Suez Canal tax are specified.
IN CASE OF WAR.
ART. 97. The company binds itself not to discontinue its service until such
discontinuance is authorized by the Government. Until such authorization, the
Government is responsible for risks to which the company is exposed. If the
Government authorizes cessation of service the rights and obligations of the
company are determined by the following articles, except in case of agreement
to the contrary. The time of total or partial suspension of service is included
or not included in the duration of the contract at the option of the company.
ART. 98. The company has the right to continue all or part of its service at
its own risk, in which case it is entitled to the subsidy specified for voyages
accomplished under these conditions. The Government may take possession of
any vessel left unemployed, with its equipment and provisions, arm it and
employ it for any purpose which appears advisable, paying therefor an annual
amount representing the interest at 5 per cent of the estimated value discussed
hereafter. In addition the company is indemnified for deterioration. If the
vessel is not returned the indemnity equals the value of the vessel when turned
over to the Government. During the interruption of service the subsidy is
suppressed.
ART. 99. If the Government does not exercise the above-mentioned right it
must pay an indemnity, as interest on capital and for depreciation of vessels,
material, etc., of which it has not taken possession and to compensate the com-
pany for expenses charged to it.
ART. 100. In any case, on termination of the war the Minister may relieve
the company of the obligations of the contract if events of war have rendered it
incapable of resuming navigation. The company may decline to carry out the
contract at once if the vessels are not returned in proper condition or sufficient
number to permit resumption of full service. In such case, the Minister and
the company agree on a date for full or partial resumption of service.
VARIOUS PROVISIONS.
ART. 102. Provision is made for temporary service until the full service con-
templated in the specifications is begun.
ART. 103. The company's obligations stipulated in articles 32, 33, 34, 35, 36,
41, 43, 45, and 46, are extended to any parallel line, branch, or supplementary
voyage which the company may add of its own accord.
ART. 104. If the necessary provisions for the maintenance of maritime service
after November 30, 1937, have not been fixed prior to November 30, 1931, in
248
GOVERNMENT AID TO MERCHANT SHIPPING.
conformity with article 13 of the contract dated July 11, 1911, the provisions
of article 10 as to the average age of total gross tonnage at the end of the
concession, will be canceled.
ART. 105. If service is interrupted through a general disagreement between
the company and its personnel as to working conditions, the company is obliged
to submit the subject of the dispute to the permanent board of arbitration insti-
tuted by the law of July 24, 1909.
ART. 106. If such delay exceeds 24 hours, the Government may, with the con-
sent of the company, take measures to maintain the service. If requisition of
provisions and ship's supplies is involved, recourse is had, for estimation of
damages, either through informal agreement or through reimbursement of ex-
pense for such maintenance to be defrayed from the subsidy which is due for
the voyage, and to which the company is entitled.
ART. 107. The personnel taken on as the result of this interruption is paid at
the rate in force when work was discontinued with the retroactive right to any
increase of salaries allowed.
ART. 108. If the Government places its personnel at the disposal of the com-
pany, such persons are to receive not less than the pay on Government vessels,
nor the amount paid when service was interrupted, nor the scale definitely
adopted. The highest of these three applies from date of shipping.
ART. 109. No contract, unauthorized by the administration, can be made with
foreign Governments.
}
ART. 110. No subcontracts can be made by the company unless authorized.
ART. 111. Regardless of these specifications, vessels assigned to the service
remain subject to all general laws and regulations relative to the merchant
marine, epecially those concerning safety of navigation and regulation of labor
on commercial vessels.
ART. 112. The company is responsible for all its agents' acts as to proper
maintenance of service.
ART. 113. No one of other nationality than French may be a member or
director of the company's board of administration and its agents and corre-
spondents abroad must be, so far as possible, of French nationality.
ART. 114. The company undertakes to pay semiannually into the national old-
age pension fund, to the credit of each laborer who has worked at least 30
days during the six months' period, a sum based on the number of days' work
at the rate of 32 centimes (6.2 cents) a day, without deduction on this account
from wages. This is independent of payments (3 centimes, or 0.58 cent)
which the company is required to make under the law relative to working-
men's pensions. Laborers above 40 years of age, when the contract becomes
effective, have the right to cause payment to be made into the already existing
laborer's fund of the company.
The company, moreover, undertakes to receive (up to the proportion of 2 per
cent of regularly employed laborers) apprentices from 13 to 18 years old who
pass an examination. Such apprentices are preferably taken from families of
employees or former employees. They are furnished good professional instruc-
tion.
If the company cedes its shops and dry docks to another organization, it
must require that other to conform to the conditions of this article.
ART. 115. The company must pay annually into an old-age fund, for the em-
ployees of the shops at Ciotat, the sum of 25,000 francs ($4,825), which is used
for pensions for laborers in those shops who have reached the age of 60.
ART. 116. The company is to pay annually into the national fund for pen-
sions an allowance equal to 5 per cent of the total wages of its employees,
other than those engaged in navigation and the laborers referred to in article
114, who pay an equal amount into the same fund. On reaching the legal
limits of the national pension fund the payments in question are to be made
to one of the French insurance companies, placed under supervision of the Gov-
ernment and there used either as life insurance or as annuities, or any other
way:
ART. 117. The company must submit to the Minister a copy of its rules and
its annual report.
ART. 118. The manner of arbitrating disputes is prescribed.
ART. 119. The company must pay registration dues, stamp tax, etc., on neces-
sary documents connected with the contract.
APPENDIXES.
249
Appendix E.-RUSSIA: CHARTER AND BY-LAWS OF THE RUSSIAN
VOLUNTEER FLEET.
A new charter and by-laws of the Volunteer Fleet went into force July 5,
1913, by law approved by the Imperial Council and the Duma. A translation
of the full text follows:
Laws 1912, chapter 1350.
[Translated from Sobranie Uzakonenii, Pt. I, no. 152, p. 2845, July 18, 1912.]
SEC. 1. The statute on the Volunteer Fleet appended hereto shall be ap-
proved.
SEC. 2. Section 5 of article 372 of the statute on direct taxation (Svod
Zakonov, vol. 5, edition of 1903) shall read as follows:
Article 372: Sec. 5. Not subject to the State tax on manufactures: (5)
The Volunteer Fleet.
(Signed)
THE PRESIDENT OF THE
IMPERIAL COUNCIL, M. AKIMOV.
On the original, by the hand of H. I. M., is signed, "It shall be thus."
On the yacht Standard, July 5, 1912.
Certified: Secretary of State, Kryzhanovski.
CHARTER AND BY-LAWS OF THE VOLUNTEER FLEET.
I. GENERAL PROVISIONS.
SEC. 1. The Volunteer Fleet is an enterprise founded upon contributions and
has for its purpose the maintenance of maritime steamship communications
for the transportation of passengers and freight in order to help the develop-
ment of Russian commerce and merchant marine.
SEC. 2. The Volunteer Fleet shall be under the supervision of the Minister of
Commerce and Manufactures.
SEC. 3. The operations of the Volunteer Fleet shall be conducted on a busi-
ness basis. For all bills and demands made upon it the Volunteer Fleet shall
be liable with all its property, both movable and immovable.
SEC. 4. In proportion to the obligations imposed upon the Volunteer Fleet
by the Government, the fleet may receive subventions from the State treasury,
such subventions to be applied for and appropriated by legislative procedure
for a definite period in a definite amount.
SEC. 5. The assets of the Volunteer Fleet shall consist of (a) sums obtained
from the former Volunteer Fleet Co.; (b) donations; (c) income from com-
mercial operations; (d) the subvention paid by the State treasury.
SEC. 6. The Volunteer Fleet shall have a special flag.
II. OBLIGATIONS OF THE VOLUNTEER FLEET TOWARD THE GOVERNMENT AND RIGHTS
OF THE FLEET.
SEC. 7. In case of a partial or general mobilization, as well as in other
emergency, every vessel and any property on shore belonging to the Volunteer
Fleet shall be transferred, by the order of the Minister of Commerce and
Manufactures, for the temporary use or into full possession of the War and Navy
Departments. The conditions of transfer of the vessels and of the property
on shore shall be determined by the Minister of Commerce and Manufactures
with the concurrence of the Ministers of War and of the Navy, and also of
the Minister of Finance and of the State Auditor.
NOTE.-Upon the publication of the regulations on the military navigation
service the property of the Volunteer Fleet and its personnel shall serve the
needs of the War and Navy Departments according to the above-named
regulations.
SEC. 8. Government employees traveling on duty, military persons, emigrants,
and passengers generally transferred by orders of the Government as well as
Government cargoes and mails, shall be carried on all lines maintained by the
Volunteer Fleet according to rules determined by special agreements made be-
tween the management of the Volunteer Fleet and the respective departments,
subject to the approval of the Minister of Commerce and Manufactures.
250
GOVERNMENT AID TO MERCHANT SHIPPING.
SEC. 9. In case of equal bids for the transportation of soldiers and State
cargoes of the Government departments, the Volunteer Fleet shall have pref-
erence over all other navigation enterprises.
III. OPERATIONS OF THE VOLUNTEER FLEET.
SEC. 10. For the organization of maritime steamship communication (sec.
1) the Volunteer Fleet is authorized to own, construct, and lease buildings,
wharves, docks, steamships, and other vessels of all kinds, piers, shipyards, dry
docks, landing places, mechanical appliances for the loading and unloading of
freight, factories, coal mines, naphtha works, and to own or lease any other
necessary movable and immovable property.
SEC. 11. The liability of the Volunteer Fleet for loss or damage of freight,
or for violation of the terms of agreements as to freight delivery, shall be de-
termined in accordance with existing law and in accordance with the agree-
ments made between the Volunteer Fleet and the shippers. These terms shall
be indicated on the bills of lading and freight receipts. The regulations relating
to the general conditions of such liability, and to the methods and terms of
carrying passengers and baggage, as well as the regulations on the receipt and
storage, transfer and delivery of freight, shall be fixed by the management and
exhibited in the head office, branch offices, agencies, landing places, and vessels
of the Volunteer Fleet. The Minister of Commerce and Manufactures is au-
thorized to annul any of the aforesaid regulations which shall be found con-
trary to law and inconsistent with the interests of the State or of the com-
munity, or with the needs of industry and commerce.
NOTE. The regulations issued according to this (11th) section, upon their
presentation to the Minister of Commerce and Manufactures, shall at the same
time be transmitted to the Ministers of the Navy and War, who, if they find it
necessary to revoke any of the provisions therein, shall so inform the Minister
of Commerce and Manufactures.
SEC. 12. The Volunteer Fleet enjoys in regard to the cargo which it has under-
taken to transport the rights indicated in section 81913 of the code of commerce
(Svod Zakonov, Vol. II, Pt. II, supplements of 1910), the right to sell the
whole cargo or a part of it, in cases provided by section 81914 of the same code,
as well as the right to sell damaged or undamaged freight or part of it for the
settlement of accounts with the shipper for damages.
SEC. 13. The sale of the cargo shall be effected according to the regulations
provided by sections 819¹-8191 of the code of commerce (Svod Zakonov, Vol.
XII, Pt. II, supplements of 1910).
SEC. 14. In foreign ports, before executing the sale of the cargo, the Volun-
teer Fleet shall notify the Russian consul, and in case of need shall accept his
instructions and cooperation.
SEC. 15. The Volunteer Fleet is authorized to undertake any kind of commis-
sion business as regards purchase and sale of goods to be received for trans-
portation by the fleet, as well as the clearance of such goods from customs
duties. The issuance of regulations governing the sale of commission goods
according to the existing enactments on commercial intermediaries (Svod
Zakonov, Vol. XI, Pt. II, commercial code, sections 54'-54", supplements of
1910) and the approval of commission rates to be charged for all of the above-
named operations shall be within the discretion of the management of the fleet.
SEC. 16. The Volunteer Fleet may issue short-time loans upon freight which is
not easily damaged and which is insured and carried by the Volunteer Fleet
during periods while such freight is either in transit or in the warehouses of
the Volunteer Fleet to an amount not exceeding 60 per cent of the value of the
goods. Such loans may be issued by the Volunteer Fleet upon the security
of goods of both Russian and foreign origin.
The terms of the issuance and of the repayment of loans shall be determined
by the Volunteer Fleet by agreement with the borrowers, provided that such
terms shall not run contrary to law or to the regulations of the present charter.
The Volunteer Fleet, as regards such loans, shall enjoy the rights laid down
by sections 819-819" of the commercial code (Svod Zakonov, Vol. XI, Pt. II.
supplements of 1910), subject to the provisions of sections 13 and 14 of the
present charter.
SEC. 17. The details of the issuance and repayment of loans (sec. 16) shall be
determined by special rules to be approved by the Minister of Commerce and
Manufactures, with the concurrence of the Minister of Finance and the State
Auditor.
APPENDIXES.
251
SEC. 18. The Volunteer Fleet is permitted to insure the freight to be trans-
ported by its vessels in insurance companies in the name and to the account of
the shippers and according to their instructions.
IV. AUDIT OF THE OPERATIONS OF THE VOLUNTEER FLEET,
SEC. 19. The money operations and other business of the Volunteer Fleet, as
well as its accounts, are subject to auditing by the State Auditor according to
special rules laid down by the State Auditor, with the concurrence of the
Minister of Commerce and Manufactures. The amount necessary for the or-
ganization of such auditing shall be determined by the State Auditor, with the
concurrence of the Minister of Commerce and Manufactures, and shall be
placed at the disposal of the State Auditor from the funds of the Volunteer
Fleet.
SEC. 20. All remarks of the State Auditor shall be communicated to the man-
agement of the Volunteer Fleet. If the explanations of this management shall
be found unsatisfactory by the State Auditor, then the controversy thus arisen
shall be settled by the Minister of Commerce and Manufactures, with the con-
currence of the State Auditor.
SEC. 21. The State Auditor is authorized to examine the money accounts and
other property for the Volunteer Fleet.
V. ACCOUNTS AND DISTRIBUTION OF PROFITS.
SEC. 22. The plan of operations and budget for each year shall be made up
by the management of the Volunteer Fleet, and shall be submitted for the ap-
proval of the council of the fleet not later than November 1 of the preceding
year. The said plan and budget shall be approved by the Minister of Commerce
and Manufactures.
SEC. 23. The fiscal year of the Volunteer Fleet shall extend from January 1
to December 31, inclusive. Detailed accounts of the operations of the fleet for
each year and the annual report of the management shall be submitted on
January 1 of the following year to the State Auditor, and then it shall be sub-
mitted, together with the remarks of the latter, for the approval of the council
of the Volunteer Fleet. The accounts and the report shall then be approved by
the Minister of Commerce and Manufactures, and, as approved and submitted
by the Minister of Commerce and Manufactures to the Cabinet of Ministers, they
shall be published in parts for general information.
SEC. 24. From the profits of the Volunteer Fleet the following shall be pro-
vided for: The sinking fund of the property, the insurance fund (for the steam-
ships of the fleet), and the reserve fund. For the sinking fund and for the
insurance fund there shall be set aside annually, for the former, 5 per cent of
the initial cost of iron ships, 3 per cent of the initial cost of stone and brick
buildings, and 10 per cent of the initial cost of wooden ships and buildings, also
of machinery and ail other movable property; for the latter, 2 per cent from
the balance value of the ships. To the reserve rund shall be transferred the
amount of the annual profits remaining after the deductions for the sinking
fund, for the insurance fund, and also for the bonuses to the employees of the
Volunteer Fleet (sec. 26).
NOTE. The profits of the Volunteer Fleet shall be the gross earnings after
deducting all operating expenses and losses.
SEC. 25. The deductions provided for in the previous (24th) section for the
benefit of the sinking fund of the vessels (iron and wooden) shall be discon-
tinued for vessels whose balance value shall equal 5 per cent of their initial cost.
The deductions for the insurance fund (sec. 24) shall be discontinued when
its total amount shall reach one-third of the initial value of all vessels of the
fleet. In case of using any part of this fund for the purchase of a new vessel to
replace one which has been lost, or for the settling of balances for averages
(sec. 28), the insurance fund shall be again increased by apportionments from
profits up to the amount indicated above.
SEC. 26. From the profits of the Volunteer Fleet remaining after the deduc-
tions made according to section 24 there may be paid out, after the approval
of the accounts by the Minister of Commerce and Manufactures, an additional
remuneration to the chairman and members of the board of directors, the
managing director, and other employees of the fleet to an amount not exceeding
50 per cent of the salary of each.
252
GOVERNMENT AID TO MERCHANT SHIPPING.
SEC. 27. The additional remuneration (sec. 26) to the chairman and mem-
bers of the board of directors, as well as to the managing director, shall be
fixed by the Minister of Commerce and Manufactures, and to the rest of the
employees by the management within the limits of the amount apportioned for
this purpose by the Minister of Commerce and Manufactures.
SEC. 28. The insurance fund of the Volunteer Fleet shall be used for the pur-
chase and building new ships to replace those which have been lost, and also for
covering the expenses for averages.
SEC. 29. The reserve fund of the Volunteer Fleet shall be used: (1) For the
purchase and for the building of new vessels to replace those worn out; (2)
substantial repairs of vessels, machinery, and boilers, and for replacing old
boilers by new ones; (3) for improvements of the water-front structures; (4)
for the purchase of real estate and for the construction of necessary buildings;
(5) for the issuance of loans on goods as provided by sections 16 and 17 of the
present charter; and (6) for the expansion of business.
SEC. 30. Questions as to the assignment of the expenditures during the year
to the sinking fund, the insurance fund, and to the reserve fund are to be set-
tled by the Minister of Commerce and Manufactures, with the concurrence of
the Minister of Finance and the State Auditor.
SEC. 31. The free assets of the Volunteer Fleet shall be invested in Gov-
ernment securities, or in securities guaranteed by the Government, and shall
be placed in the State bank for safe-keeping. The amounts necessary for the
operations of the fleet may be kept on current accounts in the State bank, and
also in private banks according to the instructions of the Minister of Com-
merce and Manufactures.
VI. THE MANAGEMENT OF THE VOLUNTEER FLEET.
SEC. 32. The management of the Volunteer Fleet shall be entrusted to a
council, a board of directors, and a managing director, according to provisions
laid down by the present charter.
1. The council of the Volunteer Fleet.
SEC. 33. The council of the Volunteer Fleet shall consist of a chairman,
appointed by the Minister of Commerce and Manufactures, and 13 members,
of whom 5 shall be appointed, one each by the heads of the following de-
partments, namely, commerce and manufactures, war, navy, finance, and the
State auditor's office, and 8 shall be elected for 3 fiscal years (sec. 23), one by
each of the following: The Imperial Society for the Aid of the Russian Mer-
chant Marine, the Council of the Conventions of Representatives of Industry
and Trade,¹ the Council of the Conventions of Representatives of the Stock
Exchange and Agriculture, and the boards of the stock exchanges of Moscow,
St. Petersburg (Petrograd), Odessa, Libau, and Vladivostok. The chairman
and members of the board of directors and the managing director shall be
ex officio members of the council and they shall have the right to speak.
NOTE 1.-In case of sickness or temporary absence of the chairman of the
council his duties shall be performed by the member of the council designated
by the Minister of Commerce and Manufactures.
NOTE 2.-The following persons can not be elected members of the council:
Aliens, shipowners, and persons in the management of or employed by or serv-
ing as agents of other navigation enterprises, and also Jews.
SEC. 34. Of the 8 elected members of the council there shall retire accord-
ing to seniority: During each of the first two years of every triennium 3
members, and during the last year of the triennium 2 members. In case of
equal seniority the order of retirement shall be decided by lot. The retiring
members of the council shall be eligible for reelection.
SEC. 35. For the decisions of the council to be valid the presence of not less
than seven members shall be required. Business shall be transacted by a
majority vote, and in case of a tie the chairman shall have a casting vote. A
member of council dissenting from its decision may demand that his dissenting
opinion be recorded.
SEC. 36. The council shall convene as occasion may require or whenever the
Minister of Commerce and Manufactures or the chairman of the council may
deem it necessary.
1 This council roughly corresponds to the executive committee of the National Associa-
tion of Manufacturers of the United States. (Tr.)
APPENDIXES.
253
SEC. 37. The council shall pass upon the following matters: (1) Plans of
action, proposed budgets, reports of the management and accounts; (2) pro-
posals of the management relating to the opening of new lines and the closing
of those in operation; and (3) assignment of the expenses of the enterprise
to the reserve fund (sec. 30).
All matters requiring the consideration of the council shall be submitted, with
its decisions thereon, for the approval of the Minister of Commerce and Manu-
factures. In case the said Minister shall find that any matters indicated under
(2) and (3) of this article (sec. 37) are of special urgency and secrecy, such
matters may also be decided by him without the opinion of the council, either
directly or with the concurrence of the Ministers of War and Navy, if connected
with questions of national defense.
NOTE. The Minister of Commerce and Manufactures may also submit to the
consideration of the council other matters connected with the management of
the Volunteer Fleet upon which the minister shall deem it advisable to have the
opinion of the council.
2. Board of directors of the Volunteer Fleet.
SEC. 38. The board of directors of the Volunteer Fleet shall consist of a chair-
man and four members, including one member from the Navy Department,
together with representatives of the War Department and the State Auditor's
office. The two last named shall have a voice only and no vote. The managing
director shall take part in the meetings of the board of directors, with the
right to vote. The board of directors shall have its domicile in St. Petersburg
(Petrograd).
SEC. 39. The board of directors of the Volunteer Fleet shall have its own seal,
with the State coat of arms, according to a design to be approved by the Minister
of Commerce and Manufactures.
SEC. 40. The chairman of the board of directors shall be appointed, with the
approval of the Cabinet of the Ministers, by the Minister of Commerce and Manu-
factures from persons who are not in the classified State service with a fixed
salary. Three members of the board of directors shall be appointed by the
Minister of Commerce and Manufactures. The member of the board of directors
from the Navy Department shall be appointed by the Minister of the Navy from
among the members of that department. Similarly, the representatives of the
War Department and the State Auditor's office shall be appointed by the Min-
ister of War and the State Auditor from among the members of their respective
departments.
SEC. 41. In case of sickness or temporary absence of the chairman of the
board of directors his duties shall be performed at the designation of the Min-
ister of Commerce and Manufactures by one of the members of the board of
directors. In case of sickness or absence of members of the board of directors
or of the representatives of the State Auditor's office and the War Department
substitutes shall be appointed in the order indicated in the previous (40th)
section, who shall have the same rights as the persons whom they are replacing
during the whole period in which they act as substitutes.
SEC. 42. In the transaction of business relating to departments other than
those mentioned in section 36 the representatives of the respective ministries
or departments shall be invited to take part in the meetings of the board of
directors.
SEC. 43. For decisions of the board of directors to be valid the presence of the
chairman or his substitute and of the two members of the board shall be
required. The proceedings of the board of directors shall be recorded and
signed by all persons present at the meeting.
SEC. 44. The decisions of the board of directors shall be taken by majority
vote, and in case of a tie the chairman or his substitute shall have a casting
vote. A member of the board of directors dissenting from the decision of the
board may demand that his dissenting opinion be entered upon the record. In
such a case he shall be freed from responsibility for that decision, but such a
dissenting opinion shall not stay execution of the decision.
SEC. 45. The board of directors shall have charge of all business, property,
and funds of the Volunteer Fleet, and especially of—
(1) Examination and approval of proposed agreements with contractors to
be entered into by the board, and also formulation of the general terms under
which such agreements shall be made. Authority to make these and other
254
GOVERNMENT AID TO MERCHANT SHIPPING.
agreements may be delegated to the employees of the Volunteer Fleet by the
board of directors.
(2) Supervision through its members over the local institutions of the
Volunteer Fleet, and auditing of the property and of the business of the fleet
in places where such business is carried on.
(3) Formulation of the regulations mentioned in section 11 of the present
charter.
}
(4) Fixing methods of sale of goods on commission, approval of the rates
of remuneration for the operations of the fleet, and making rules as to the
issuance and repayment of loans upon goods (secs. 15–17).
(5) Issuance and acceptance for payment of bills of exchange and of all
other notes within the limits approved by the Minister of Commerce and
Manufactures.
(6) Discount of bills of exchange received by the Volunteer Fleet.
(7) Making agreements in the name of the Volunteer Fleet.
(8) Issuance of powers of attorney (a) to the employees of the Volunteer
Fleet; (b) to the representatives of the board of directors intrusted with
making agreements and signing articles.
(9) Making contracts for the purchase and sale of real estate and also of
ships.
(10) Purchase of securities for the Volunteer Fleet, as well as the sale and
mortgaging of those securities.
(11) Making and amending freight and passenger rates (tariffs).
(12) Capital repairs of vessels.
(13) Determination of allowances and expenses on board the vessels of the
fleet.
(14) Making agreements by the Volunteer Fleet for the establishment of
free connections with other navigation enterprises and with railroads.
(15) Preparation of plans of action, projects of the budget, reports and
balances of the Volunteer Fleet.
(16) Purchase and sale, leasing from others and leasing to others of ships,
and of real estate.
(17) Establishing and closing offices and agencies of the fleet.
(18) Opening new lines and abolishing existing ones.
(19) Alteration and redistribution of voyages on existing lines.
(20) Establishing and changing the methods of accounting.
(21) Hiring the necessary staff of employees for the Volunteer Fleet and
fixing their duties and salaries.
(22) Apportionment of an additional remuneration and granting aid to the
employees of the Volunteer Fleet.
(23) Conduct of litigation in the courts.
(24) Conduct of the aid and savings fund of the volunteer fleet.
(25) Initiating proposals relating to the apportionment of the expense of the
enterprise to the reserve fund.
(26) Working out the instructions for the managing director.
NOTE 1. The decisions of the board of directors in matters enumerated in
16, 17, 19, 20, and 26 of this (forty-fifth) section are subject to the approval of
the Minister of Commerce and Manufactures, who shall obtain previously the
concurrence of the Minister of the Navy upon all matters relating to the con-
struction or sale of steamships.
NOTE 2.-The decisions of the board of directors in matters mentioned under
15, 18, and 25 of this (forty-fifth) section shall be submitted by the board of
directors for the approval of the council of the Volunteer Fleet (sec. 37).
SEC. 46. The details of the procedure of the board of directors and the limits
of its rights and duties shall be determined by an instruction subject to the
approval of the Minister of Commerce and Manufactures.
SEC. 47. The drawing of funds from the State bank shall be done upon orders
issued by the board of directors, to be signed by the chairman and one of the
members empowered by the board to do so. The drawing of money from cur-
rent accounts of the board shall be done by checks signed by the chairman and
the treasurer.
SEC. 48. Powers of agency and powers of attorney for litigation in courts, as
well as for signing agreements, terms, and articles in the name of the board,
shall be signed by the chairman and one of the members empowered by the
board to do so. On receipts for money remitted to the board by mail and for
packages and documents the signature of the chairman or the member empow-
APPENDIXES.
255
ered by the board, or the signature of the managing director, with the seal of the
board, shall suffice.
The business correspondence of the Volunteer Fleet shall be carried on in
the name of the board.
SEC. 49. The chairman and members of the board shall receive for their serv-
ices special remuneration from the funds of the Volunteer Fleet, the former
12,000 rubles per annum, the latter 6,000 rubles per annum each, except those
persons who shall be in the classified State service at fixed salaries. These per-
sons shall receive annually one-half of the above remuneration.
SEC. 50. There shall be a bookkeeping department and an office connected
with the board for the conduct of its business, keeping money and other ac-
counts, and auditing these accounts in the offices and agencies and on board the
vessels of the fleet.
8. The managing director.
SEC. 51. The managing director shall have charge of the immediate supervi-
sion of the business of the Volunteer Fleet and of the execution of the decisions
of the board; also of the supervision of the personnel on board the ships and
of the establishments of the Volunteer Fleet on shore. The limitations of the
rights and duties of the managing director shall be fixed by a special instruction
to be prepared by the board of directors (sec. 45 [26]).
SEC. 52. The managing director shall be nominated by the board of directors
and appointed by the Minister of Commerce and Manufactures, and shall re-
ceive a salary from the funds of the Volunteer Fleet, to be determined by the
Minister of Commerce and Manufactures, with the concurrence of the Minister
of Finance and the State Auditor.
VII. PERSONNEL.
SEC. 53. The chairman and members of the board of directors, as well as all
employees on shore and the crews, shall be Russian subjects. Exceptions to
this rule shall be allowed in the case of agents and employees on shore in for-
eign countries only, by special permission of the Minister of Commerce and
Manufactures, to be obtained in each case separately. Jews shall not be ad-
mitted to the service of the Volunteer Fleet.
SEC. 54. Office managers, agents, captains of vessels of the Volunteer Fleet,
the chief bookkeeper, and the secretary of the board of directors shall be con-
firmed in their offices or, on petition of the board of directors, discharged by the
Minister of Commerce and Manufactures. Other positions shall be filled by the
managing director.
SEC. 55. The reserves of the army and navy shall be given preference in ap-
pointments to the service in the Volunteer Fleet. The captains, officers, me-
chanics, surgeons, engineers, sailors, and firemen of the vessels of the Volunteer
Fleet shall be chosen chiefly from among members of the navy department who
are either in the reserves or on the retired list.
NOTE.-The offices mentioned in this (55th) section may also be filled by mem-
bers of the navy who are in active service. The payments to the invalidity
fund of the navy department due from the officers, engineer mechanics, and
surgeons of the Volunteer Fleet shall be made from the funds of the fleet and
deducted from their salaries.
(Signed)
THE PRESIDENT OF THE IMPERIAL COUNCIL, M. AKIMOV.
INDEX.
Admiralty subventions. See Subventions. Page.
Adria. See Royal Hungarian Ocean Navi-
gation Co., Adria.
African Steamship Co., amounts received.... 52,75
financial statement.
Allan, H. & A., contract..
service of....
speed requirements.
subventions.
American clipper ship.
59
Austro-Americana Line, history of...
Austro-Hungarian Lloyd, subventions....
See also Austrian Lloyd.
Austrian Steamship Co., Dalmatia, con-
Page.
98
24,93
70
tracts..
99, 100
52, 62, 64
postal subventions.
99
64, 70
services.
99
52, 62, 64
State control.
99
46
Auxiliary cruisers, use of merchant ships as..
15
Anchor Line, financial statement.
not subsidized..
Archangel-Murman Steamship Co., bounties.
59
22
204
Barbados, payment toward subventions..... 55,75
Belgian-Congo Steamship Co., service..
124
history.
204
special State aid..
124
services.
204
Belgian National Co. of Maritime Transporta-
State control.
204
tion, loans from State..
124
State ownership.
27, 205
service...
124
State participation in profits..
29, 205
Belgium, bounties..
125, 126
Argentina, bounties...
228
coasting trade, reservation of.
--
9, 123
coasting trade, reservation of.
228
development of merchant marine.
228
rank among merchant navies of Latin
America..
228
tonnage..
228
Australia, financial statistics.
72, 73
postal subventions..
18, 71-73
preferential duties on British goods.
steamship service...
Western Australia.
Austria, bounties....
loans to shipowners..
maintenance bounties
70,73
27,73
50
foreign lines granted bounty.
import duties, exemption from.
light dues, reimbursement of..
loans to shipowners..
pilotage fees, reimbursement of…….
port charges, reimbursement of
postal subventions not granted.
preferential railway rates...
rank among merchant navies.
26, 124, 125
10, 123
13, 123
13, 124
13, 123
13, 14, 123
125
123
122
registry of foreign-built ships.
11
19, 20, 25, 86, 89, 93
State-owned steamship lines.
12,88
tonnage statistics.
122
22
26
90, 91
Bounties, kinds of..
8
navigation bounties.
91
Bounties, amounts expended in Brazil..
230
preferential railway rates
88
subventions.
24, 86, 93, 101
Bulgaria.
Chile..
208
231
Suez Canal dues, reimbursement of.....
88
Denmark.
109
taxation, exemption from.
14,87
France.
141, 143, 144, 148, 154
tonnage statistics..
86, 87
Italy.
179
trade bounties.
89,90
Japan.
219, 221
Austria-Hungary, bounties.
19,
Mexico.
232
20, 25, 86, 89-93, 101–102
Norway
-
114
coasting trade, reservation of.
financial statistics.
9,87
97,100
Peru.
232
Russia.
202, 206
import duties, exemption from
t-
87
rank among merchant navies.
seacoast limited..
86
Sweden.
Bounties granted by Austria-Hungary.
121
19
20,86
France..
19
tonnage statistics.
See also Austria; Hungary.
87
Great Britain.
19
Austrian Lloyd Steamship Co., canal dues,
Italy.
19
reimbursement of..
Japan..
19
14,94
contracts...
Spain..
19
94, 95, 96, 97
financial statements.
United States
97
19
history.
loans from Government.
93,97
12,88
Bounties, rate of, in Austria
89, 92
France.
140
postal subventions.
24, 93, 96, 97
Hungary
101
services...
94, 95, 96, 98
Italy.
168, 174
speed required.
94,96
Japan.
219
State control...
28 95
Russia
200
See also Austro-Hungarian Lloyd.
41987°-16———————17
Spain..
188, 191
257
258
INDEX.
Page.
Page.
Braun & Blanchard (Chile), bounties.
231
Coasting trade, reservation of, Germany..
9,78
service....
231
Great Britain.
9,49
Brazil, agreement with four Italian shipping
Netherlands..
9,127
companies..
230
Norway.
9,112
bounties..
228, 229, 230
Portugal.
9
coasting trade, reservation of.
229
Russia.
9, 197
construction bounties..
229
Spain:
9, 186
postal subventions..
15, 26
Sweden.
9, 118
rank among merchant navies of Latin
United States.
9,37
America...
228
Collins Line, history of...
17, 23, 39
State ownership of steamship lines
tonnage statistics.
27,228
229
Bremen..
24, 76, 86
postal subventions..
Compagnie de Navigation Sud-Atlantique,
history...
17,39
161, 163
British & African Steam Navigation Co.,
postal subventions.
161, 162
amounts received.
52,75
financial statement...
59
British Guiana, payment toward subven-
services
state participation in earnings.
Compagnie des Chargeurs Réunis, financial
155, 161, 162
29,163
tions.
55, 75
statements..
164
British India Steam Navigation Co., sub-
ventions to..
postal subventions.
161
52
service..
161
Bulgaria, bounties to Bulgarian lines..
208
speed....
161
bounties to foreign lines.
21, 208
Compagnie des Messageries Maritimes, canal
rank among merchant navies.
208
dues, reimbursement of...
14
State ownership of steamship lines..
208
contract..
156, 157, 242
State participation in profits..
tonnage statistics...
Bulgarian Steam Navigation Co., bounties..
State ownership..
Bureau of Navigation, reports that discuss
Government aid to shipping......
208
financial statements.
165
208
postal subventions..
158
29, 208
preferential railway rates.
138
29, 208
services.
138, 155, 158
speed..
158
7
State control………..
18, 156, 242
Canada, contracts for mail service
18, 62, 65, 70
financial statistics.
62, 64
postal subventions.
56, 62
preferential duties on British goods.
50
speed requirements.
63
State ratification of contracts.
62
steamship lines..
62, 64
State participation in earnings...
Compagnie des Messageries Nationales. See
Compagnie des Messageries Maritimes.
Compagnie des Chemins de Fer du Nord,
postal subventions.
services...
Compagnie Générale Transatlantique, finan-
cial statements.
29
163
155, 163
164
from Mexico
service...
speed required..
steamship services..
Canadian-Mexican Atlantic Co., bounties
Canadian Pacific Railway Co., contract.
subvention paid by Canada.
subvention paid by Great Britain.
62, 64
history
158, 161
postal subventions...
158, 161
232
preferential railway rates.
138
69,70
services...
138, 155, 158, 160
56, 62, 64
speed.....
159, 160
56, 64
State control..
18, 160
56
52,56
Canal dues, reimbursement of, Austria..
-
14,88
France.
14
State participation in earnings..
Compagnie Marseillaise de Navigation à
Vapeur Fraissinet et Cie., postal sub-
vention...
29, 159
Italy.
14, 167
preferential railway rates.
Russia.
Sweden.
14, 199
services.....
14, 119
subvention from Bulgaria..
Ceylon, payment toward subventions..
53,75
Compañía Trasatlantica Española, postal
Chile, bounties..
231
subventions
payment of subvention to Pacific Steam
service..
Navigation Co..
postal subvention to foreign steamship
21, 56, 231
line..
26
Construction bounties. See Bounties.
Corinth Canal dues, refunded by Italy..
Cunard Steamship Co., amounts received.... 52,53
161
138
155, 161
21,208
193
193
14, 167
rank among merchant navies.
230
financial statement..
61
reimbursement of port dues.
14, 231
loan..
12,51
tonnage statistics...
230
Lusitania..
13, 22
China Mutual Steam Navigation Co., finan-
Mauretania….
cial statement.
59, 60
postal subventions..
13, 22, 26
16, 23, 52, 55
Coasting trade, reservation of, Austria-Hun-
gary..
9,87
requirements of contract
service......
55
52,53,54
Belgium.
9,123
Denmark...
9, 107
France.
9, 136
stock owned by Government
subsidy element in early grants.
trans-Atlantic trade established..
55
21
•
47
INDEX.
259
Page.
Page.
Danube Steamship Co., contracts.
history..
loans from State.
postal subventions.
service....
State control..
Definition of terms.
Denmark, bounties
coasting trade, reservation of..
import duties, exemption from
motor vessels.
100, 101
100
Foreign-built vessels, admission of, to national
registry, Great Britain.
10, 47, 50
12, 88, 89, 100
Greece.
11, 209
100
100, 101
Japan.
10
Netherlands.
11
101
Norway
11
8
Portugal
11
... 108, 109
Spain.
11
107
Sweden.
11
107
United States
11, 34, 35, 36, 37
106, 107❘
port dues, reimbursement of.
13, 108
Foreign lines receiving subventions.
Forms of Government aid……….
21
8
postal subventions...
17, 110
preferential railway rates
108
purpose of bounties
108, 109
rank among merchant navies
106
tonnage statistics..
106
wharfage charges, refund of..
108
Fraissinet et Cie. See Compagnie Marseil-
laise de Navigation à Vapeur Fraissinet
et Cie.
France, administrative regulations for appli-
cation of law of April 19, 1906.....
advantages for sailing vessels..
238-242
135, 136
Depreciation bounty in Austria.
89
bounties..
19, 20, 24, 140, 154
Direct aid. See Bounties; Subsidies; Subven-
cargo, character of...
tions.
8
coasting trade, reservation of……………………
construction bounties...
136
9, 136, 137
140, 144, 149, 151
10,
Elder Dempster & Co., bounties to.
16, 22
financial statement.
59
purpose of bounty..
22,75
service
16, 22, 75
speed requirements..
64,75
Direct aid, forms of..
Dominion of Canada. See Canada.
Drawbacks on shipbuilding materials.....
107, 112, 118, 167
Dutch East Indies, postal subventions.. 28, 132, 133
State control of privately owned lines…….. 28, 132
State participation in profits....
29, 132
contract of the Compagnie Des Message-
ries Maritimes of December 30, 1911....
156,
242, 248
decree prescribing administrative regis-
tration for the application of the law of
April 19, 1906, relating to the merchant
marine..
equipment bounties
financial statistics of steamship compa-
nies..
import duties, exemption from
law of April 19, 1906, concerning merchant
238-242
145, 148, 151, 154
164, 165
137
subsidy from Canada.
64
marine...
subsidy from Jamaica..
•
75
loans to shipowners.
234-238
13, 139
Ellerman Lines, financial statement..
59,60
navigation bounties
140, 142, 144, 145, 148
Emigrant traffic.
76, 77
postal subventions
15, 17, 24, 155, 165
Equipment bounties in France.
151
preferential railway rates.
137, 138
Equipment bounties. See Bounties.
Export rail rates, Belgium..
12, 123
rank among merchant navies
registry of foreign-built ships.
135
11, 137
Denmark..
12, 108
State control...
155
France..
·
137
State participation in earnings...... 29, 159, 163
Germany..
Netherlands.
Norway..
12
tonnage statistics...
135
12
Furness, Withy & Co., financial statement..
60
12
service...
64
Spain..
Sweden.
United States.
12, 187
speed requirements.
64
12, 118
subventions.
64
12
Furness-Houlder Argentine Lines, financial
statement.
59,60
Fabre Line, preferential railway rates..
Falkland Islands, payments toward subven-
138
tions.
75
Gambia, payment toward subventions.......
German-Australian Steamship Co., bounty
75
Faroe Islands.
See Denmark.
from Belgium…….
125
Financial statistics of lines, Austria………
97
contract with Belgium.
125
France.
164-165
financial statement
85,86
Germany..
84-86
German East Africa Line, construction of
Great Britain
57-61
vessels..
78,83
Japan..
223-226
financial statement.
85,86
Netherlands.
128, 129, 130, 131, 133, 134
preferential railway rates.
12,79
Roumania..
purpose of subventions.
84
207
services....
84
Spain..
194
Fiume.
Foreign-built vessels, admission of, to national
German Levant Line, bounties from Bul-
20,86
garia....
21,208
financial statement.
registry, Denmark.
France
Germany..
85,86
11
11, 137
preferential railway rates in Germany. 12, 79, 80
preferential railway rates in Bulgaria and
10
Turkey.....
80
260
INDEX.
Page.
Germany, coasting trade, reservation of..
--
9,78
Holland-American Line, financial statement.
panies....
construction of vessels.
financial statistics of steamship com-
foreign-built vessels admitted free.
import duties, exemption from..
78,83
no State aid..
84-86
78
tonnage...
Hongkong, payment toward subventions..... 53,75
Hungarian-Croatian Steamship Co., history..
Page.
134
134
134
105
78
postal subventions...
105
over-seas shipping, development of
76,78
services...
105
postal subventions
·
15, 17, 21, 76, 78, 82, 84
Hungary, bounties..
19, 20, 25, 86, 101, 102
preferential railway rates.
12, 76, 79, 80
postal subventions.
24,86
rank among merchant navies.
76
taxes, exemption from
88
rapid development of merchant marine.. 23,76
tonnage statistics.
86,87
registry of foreign-built ships.
10
•
shipbuilding industry..
76
Iceland. See Denmark.
shipbuilding materials, exemption from
import duties...
79
Import duties on ships and shipbuilding
materials, exemption from, Austria-
State railways..
79
Hungary
87
tonnage statistics...
77
Belgium...
10, 123
Gold Coast, payment toward subventions...
75
Denmark..
10, 107
Gothland Steamboat Co., postal subvention.
120
France.
10, 137
services..
120
Germany..
10,78
Great Britain, Admiralty subventions.
51,52
Great Britain.
amounts paid in direct aid.
52
Greece...
9,50
209
bounties...
19
Italy..
10, 167
cargo ships, importance of.
51
Japan..
214
no aid received...
22
Netherlands.
10, 127
causes of development of merchant ma-
rine....
Norway..
10, 112
45,47
Russia..
10, 198
coasting trade, opened to foreign ships...
49
Spain.
10, 187
proportion carried in British ships…….. 49
reservation of..
Sweden..
10, 118
9, 23, 49, 50
financial statistics of steamship compa-
United States.
Indirect aid. See Canal dues, reimbursement
10,37
nies.
57,61
Government ownership of stock.
51
import duties, exemption from..
50
of; Coasting trade, reservation of; Import
duties, exemption from; Loans to ship-
owner; Preferential railway rates; Port
lines receiving direct aid.
52.
loans to shipowners...
51
charges, reimbursement of; Taxation,
exemption from.
preferential duties in British possessions.
50
preferential railway rates not granted……….
50
International Mercantile Marine Co. of New
Jersey, lines controlled by..
60
postal subventions..
15,51,52
organization of………….
51, 54
proportion of tonnage receiving direct aid.
51
Iron and steel as factors in shipbuilding... 34, 46, 76
rank among merchant navies
45
Italy, bounties...
19, 20, 24, 168, 182
registry of foreign-built ships..
10
conjunction with Brazilian Govern-
shipbuilding, specialization and standard-
ization..
ment.
181
47,50
Chilean Government
181, 182
tonnage statistics.
45
bounties to freight ships.
180
trade routes.
48
canal dues, refund of……….
14, 167
trade subsidy..
51,52
coal transportation bounty
169
Great Eastern Railway Co., subvention of…….. 52,56
coasting trade, reservation of.
9, 167
Greece, coasting trade, reservation of..
209
construction bounties.. 168, 170, 173, 176, 179, 180
import duties, exemption from.
209
foreign line receiving postal subvention
postal subventions.
210
from..
21, 182
rank among merchant navies
209
import duties, exemption from.
10, 167
registry of foreign-built ships.
11
natural advantages for shipping.
165
tonnage statistics..
209
navigation bounties....
169, 171, 175, 178, 180
Guatemala, contract with Pacific Mail Steam-
postal subventions..
182, 185
ship Co...
231
rank among merchant navies
165
postal subvention to foreign steamship
rate of bounties..
168, 169, 174
line.....
26, 231
repair bounties.
168, 179, 180
State ownership
185
Hamburg, as a port for Austria-Hungary...
20,86
tonnage statistics.
166
importance of for Germany.
24
in Hanseatic League..
Hamburg-American Line, emigrant service..
India, payments toward subventions..
53,75
76
77
Jamaica, bounties..
75
financial statement.
little Government aid.
Hanseatic League......
85,86
purpose of bounties..
75
17, 23
Japan, bounties.
20, 25, 215, 223
76
coasting trade, reservation of……...
214
INDEX.
261
223, 226
214
216, 217, 218, 219
221
18,215
Japan, construction bounties..
Page.
215, 218, 219
development of merchant marine... 25, 211, 214
financial statistics of steamship compa-
nies
import duties, exemption from.
navigation bounties....
ports of call on more important subsidized
lines.....
postal subventions.
Navigation bounties. See Bounties.
Page.
Netherland Steam Packet Co., contract.... 128, 129
financial statement.
subventions from Italy.
subventions from Netherlands.
Netherlands, bounties not granted.
coasting trade, reservation of...
financial statistics.
•
130
service.
129
21, 182
128, 131
25
127
128, 131, 133, 134
rank among merchant navies
211, 213
registry of foreign-built ships.
11
import duties, exemption from.
lines not receiving grants.
127
133, 134
speed required of steamships.
217
postal subventions...
15, 18, 127, 131
State control..
218
tonnage statistics..
214
Java-China-Japan Line, postal subventions
from Dutch East Indies...
28, 132
rank among merchant navies
registry of foreign-built ships..
port duties..
126
11
shipbuilding materials exempt from im-
10, 127
State control by Dutch East Indies………... 28, 132
State participation in profits by Dutch
East Indies...
special grants, to certain lines.
subventions.
132, 133
15, 18, 127, 132
29, 132
tonnage statistics.
126
Kavkaz & Mercury Steamship Co., bounty..
contract.
service..
New South Wales, contract for postal subven-
205
tions..
74
205
New Zealand, contract for postal subventions
74
205
Kosmos Line, reimbursements from Belgium 14,125
Lamport & Holt Co., financial statement.... 59,60
Leyland Line, controlled by International
Mercantile Marine Co. of New Jersey..
financial statement
not subsidized..
Lloyd Brazileiro, bounties.
postal subventions.
preferential duties
16,74
·
50
Nippon Yusen Kaisha, bounties..
financial statements.
216, 221, 224
224, 225
history
226, 227
60
services.
216, 220, 221, 222
52,59,60
speed.
220
22
Nisshin Kisen Kaisha, history..
227
26, 229, 230
services.
227
services....
State control.
26, 229
State ownership.
Loans to shipowners, Austria.
Belgium..
gium..
construction of vessels.
229
27,228
North German Lloyd, bounty from Bel-
124, 125
•
23
12,88
contract...
77
12, 124
emigrant service.
78,83
France..
Great Britain.
Netherlands..
Russia....
Sweden...
Lubeck...
12, 139
postal subventions.
17, 21, 78, 82, 84
12, 51, 54
132, 133
services..
12, 198
speed required.
12, 118
76
Lusitania. See Cunard Line.
Mail subventions. See Postal subventions.
Maintenance bounties in Austria.
Manchester Liners (Ltd.), contract with..... 64,69
service....
speed required...
2088
service.
Norway, bounties.
90
64
reimbursement of port dues by Belgium. 14, 125
subvention from Belgium..
North Nigeria, payment toward subventions.
North Star Steamship Co., bounties.
coasting trade, reservation of.
contract for line to ports of the United
States in Gulf of Mexico
17, 82, 83
83
21, 124
75
119
119
113, 114
9, 112
233-234
64
cost of ships, low..
112
Mauretania. See Cunard Line.
Department of Public Works.
Meeker, Royal, "History of shipping sub-
... 114, 115
growth of merchant marine..
110, 111
sidies"
7
import duties, reimbursement of.
112, 113
Mexico, bounties.
231, 232
mail contract….
116, 117
merchant marine, small.
232
postal subventions..
15, 17, 115, 116
port charges, reduction in for certain
preferential railway rates.
113
steamship lines..
14, 232
rank among merchant navies.
110
subventions to foreign steamship lines...
26
State control..
114, 115
tonnage statistics...
232
tonnage statistics.
111
Mileage bounties. See Bounties.
trade route bounties
113, 114
Mileage bounties in Hungary
102
wages low
111
Mordecai, M. C., postal subvention paid to..
40
Occidental Line (Roumanian), cargo tonnage
207
National registry, admission of foreign-built
receipts.....
207
vessels....
10
services.
207
Nationality of officers and crew in Nether-
Ocean Co. (Belgian), loans from Belgium....
124
lands.....
133
service.
124
262
INDEX.
Orleans Railway Co. (France), preferential
Oceanic Steam Navigation Co. (British),
financial statement.
Ocean Steam Navigation Co. (American),
postal subvention from United States. 15,38
Oceanic Steamship Co. (American), postal
42
subventions from New Zealand..... 16, 21, 74
postal subventions from United States...
Orient Steam Navigation Co., financial state-
ment..
Oriential Line (Roumanian), services.
speed....
Policy of Government aid in Peru.
Portugal.
Spain.
Sweden.
United States.
Port dues, reimbursement of, Belgium.
Chile.
Denmark.
Page.
59,60
Page.
26
26
26
25
23
*
13, 123
14,231
13, 108
59
Mexico.
14, 232
207
Spain...
14, 187
207
Portugal, bounties.
194, 195
coasting trade, reservation of.
9
railway rates.
12, 138
postal subventions.
26,195
Osaka Shosen Kaisha, bounties...
216, 221, 224
rank among merchant navies.
194
financial statements.
history.
225
227
registry of foreign-built ships.
tonnage statistics..
11
·
194
services.
220, 221, 222
Postal subventions, amounts expended,
speed.....
220
Austria.
96
Pacific Coast Steamship Co., service..
Denmark.
110
64
France.
speed required...
163
64
Great Britain
Pacific Mail Steamship Co., bounties from
Mexico..
52
Greece..
210
232
contract with Guatemala.
Guatemala.
231
231
history of....
Italy..
23, 39, 40
182, 183
postal subvention from United States...
services...
Netherlands.
39
129, 131
Norway.
116
39,40
Pacific Steam Navigation Co., bounties for
Chile.....
Portugal.
-
195
Sweden
121
231
postal subventions.
United States.
42
16, 52, 56, 75
reimbursement of port dues by Chile………. 14
Postal subventions, granted by Australia…….. 18,70
Austria..
services for Great Britain.
22,56
18,93
Brazil.
service for Chile.
22, 231
15,230
Canada.
subvention from Chile..
21, 56, 231
18,62
wharf facilities at Valparaiso……….
Denmark.
110
231
ships.....
Panama Canal act, registry of foreign-built
Peninsular & Oriental Steam Navigation Co.,
France.
Germany.
15,155
..
15,82
11,37
Great Britain..
Greece.
-
15,52
amounts received by.
·
financial statement..
postal subvention of..
service...
52,53
Italy..
60
Japan...
210
18, 182
18, 215, 216
16, 23, 52, 53, 75
16, 53, 70, 71
subsidy element in early grants.
21
Peru, bounties
reimbursement of..
speed required..
ential railway rates.
bounties.....
Netherlands.
Norway..
15, 18, 127
New Zealand..
16, 18, 74
15, 115
232
Portugal
18, 194
232
Spain.
18, 193
232
Sweden.
Paris-Lyon-Mediterranean Railway, prefer-
Peruvian Steamship & Dry Dock Co.,
Pilotage charges, refund of, in Belgium..
Policy of Government aid in Austria-Hun-
15,120
Union of South Africa
18,74
12, 138
United States.
15,38-44
Postal subventions, requirements of steamers
232
receiving...
16
125
gary
Belgium.
Brazil.
Chile.
Denmark.
France.
Germany.
Great Britain.
Guatemala
Italy..
Japan
Mexico.
Netherlands.
Norway...
2*222** * 7 2 * * * * 2
See also Subventions.
Preferential railway rates, Austria..
88
Belgium....
12, 123
Denmark..
France..
Germany.
Great Britain.
Netherlands.
Norway.
Russia.
Spain..
Sweden.
United States.
Preferential taxation, in Spain..
Purchase bounties. See Bounties.
12, 108
12, 137
12, 79
50
12
12, 113
12, 198
12, 187
12, 118
12
187
INDEX.
263
Page.
Page.
Rail rates. See Export rail rates; Preferential
Russian Danube Steamboat Co., history.
203
railway rates.
services...
204
Red Star Line, not subsidized.
22
State control
203, 204
preferential railway rates.
123
State ownership..
203, 204
Repair bounties. See Bounties.
Russian Steam Navigation & Trading Co.,
Rotterdam Lloyd, contract..
128, 129
bounties..
200, 201
financial statement.
130
contracts.
201
service.
129
history.
201
subventions..
129, 131
Russian Volunteer Fleet, bounties...
200, 202
Roumania, financial statistics.
207
charter and by-laws.
249, 255
operation of steamships by government. 27,207
rank among merchant navies..
207
contracts..
history.
202
201
State ownership of merchant shipping.. 27,207
Royal Belgian Argentine Co., loans from State.
124
loans from Government...
preferential railway rates for tea.
13, 198,203
198
service.
124
services..
198, 202, 203
Royal Dutch Lloyd, service.
133
State control.
26, 203
special grants..
133
State ownership...
26, 203
Royal Dutch Steamship Co., financial state-
ment.
133
no State aid.
133
service....
133
Royal Hungarian Ocean Navigation Co.,
Adria, contracts
102, 104
history..
102
service...!
State control.
subventions..
Royal Hungarian River & Sea Navigation
94, 102, 104
103
102, 104
subventions...
Co., contract.
104
history...
104
Scandinavian countries, purpose of financial
aid...
See also Denmark; Norway; Sweden.
Shipbuilding materials. See Import duties.
Sierra Leone, payment toward subventions..
Sir James Laing & Co. (Ltd.), contract.
Sloo, A. G., postal subvention paid to...
Società Nazionale di Servizi Maritimi, postal
reimbursement of canal dues..
service.
Société des Chargeurs Réunis. See Com-
25
75
71
39
182, 183
14, 167
. 183
postal subventions.
104
pagnie des Chargeurs Réunis.
State participation in profits...
104
Sources of data.
7
Royal Mail Steam Packet Co. (British),
amounts received by.
52,55
South Africa. See Union of South Africa.
South Eastern & Chatham Railway Co.,
contract with Canada..
69
postal subventions..
speed and other requirements.
23, 52, 55, 64, 75
55, 69
grants for steamboat service.
52,56
South Nigeria, payment toward subventions. 75
Southern Steamship & Importing Co., boun-
State participation in earnings..
28,55
Royal Steam Packet Co. (Dutch), contracts
ties from Mexico..
Spain, bounties...
232
19, 21, 26, 188, 193
with Dutch East Indian Government. 131, 132
profit from operations..
131
coastwise trade, reservation of.
export bounty on coal...
186
188
services...
131, 132
financial statistics.
193, 194
subvention.
131
import duties, exemption from
187
Royal West Indian Mail Service (Dutch),
postal subventions.
26, 193, 194
contract..
130
preferential railway rates.
187
financial statement.
130
preferential taxation...
187
service..
130
rank among merchant navies.
185
subvention.
130, 131
rate of duties on foreign-built ships.
187
Russia, bounties.
199, 207
registry of foreign-built ships.
11
canal dues, reimbursement of. -
14, 199
subsidies relinquished....
192, 193
charter and by-laws of the Russian Volun-
tonnage statistics.
186
teer Fleet....
249, 255
Spanish Armada, result of destruction on
coasting trade, extent of.
197
shipping..
46
reservation of..
9, 197
committee on donations.
201, 202
Spanish trade stimulus to British industries.
State control of privately owned steamship
46
import duties, exemption from
loans to shipbuilders....
198
199
lines, Austria-Hungary.. 28, 93, 95, 99, 100, 103
France.
28, 156, 157, 160
loans to shipowners...
198, 199
Japan..
28, 218
navigation bounties.
206
Netherlands.
28, 132
preferential railway rates.
198
Norway.
28, 115
rank among merchant navies
State control of steamship lines.
196
Russia.
28, 201, 202, 204, 205
28,
State-owned steamship lines, Belgium.
State ownership of steamship lines..
tonnage statistics
201, 202, 204, 204
26,
27, 201, 202, 203, 204
196
Brazil..
26, 125
27,228
France
Italy
Japan..
27
27,185
27
264
INDEX.
Page.
State-owned steamship lines, Roumania.... 27,207
Russia...
26, 27, 201, 202, 203, 204
Sweden.
27
Tonnage statistics, Austria.
Austria-Hungary.
Belgium...
United States..
26
Brazil.
Western Australia...
27,73
Bulgaria...
State participation in profits of steamship
Chile.
companies, Austria.
28,95
Denmark..
Bulgaria..
29, 208
France.
France...
29, 156, 159, 163
Germany.
Great Britain.
28,55
Great Britain..
Hungary
·
29,104
Greece..
Netherlands
29, 132
Guatemala,
Russia...
29, 205
Hungary.
State Steamship Co. of Western Australia……….
Statistics. See Financial statistics; Tonnage
73
Italy.
Japan..
statistics.
Straits Settlements, payment toward sub-
Netherlands.
Norway..
ventions..
53,75
Portugal.
·
Subsidy, use of term…….
8
Russia.
Subsidies. See Bounties.
Spain.
Subventions, kinds of………
9
Sweden.
use of term….
Subventions to foreign steamship lines, by
Belgium..
8
United States..
Toyo Kisen Kaisha, bounties from Japan.. 216,224
Page.
86, 87
87
122
229
209
230
106
135
77
45
209
231
86, 87
166
214
126
111
194
196
186
117, 121
32, 33
21, 124
bounties from Mexico..
Brazil.
Bulgaria.
Chile....
Guatemala.
Italy.
Mexico.
21, 229
financial statements.
21, 208
history.
21, 231
services..
231
speed....
21, 182, 183, 184
Trade bounties.
See Bounties.
21, 232
Trade-route bounties, in Norway.
232
226
227
220
220
113
New Zealand.
Suez Canal dues, reimbursement of, by Aus-
•
21, 74
See also Bounties.
Trans-Atlantic Steamship Co. (Swedish),
tria..
14, 88, 94
bounty.
France
14
Trieste..
Russia.
14, 199
Trinidad, payment toward subventions....
120
20,86
55,75
Sweden...
14, 119
Svea Steamboat Co. of Stockholm, bounty.
Sweden, canal dues, reimbursement of..
119, 120
Union-Castle Mail Steamship Co. (Ltd.),
coasting trade, reservation of.
growth of merchant marine..
119
9,118
117, 118
financial statement….
speed required.
subventions to.
59
74
52,74
import duties, exemption from
118
loans to shipowners...
13, 118, 119
Union of South Africa, financial statistics………. 74
preferential duties on British goods.....
50
postal subventions...
15, 17, 120, 121
postal subventions..
18,74
preferential railway rates.
12, 118
speed required of steamers.
74
rank among merchant navies
shipowner's fund...
117
subventions..
74
13, 118
Union Steamship Co. of British Columbia
steamship companies
121
(Ltd.), service.
64
tonnage statistics.
117, 121
speed required....
64
Swedish East Asiatic Co., bounties.
119, 120
United States, coasting trade, importance of. 30,33
canal dues, reimbursement of..
14
reservation of....
9,37
contracts.
119
foreign trade.
33,36
loan from government
119
import duties, exemption from..
37,38
service.....
119
over-seas shipping, causes of decline.
34
Swedish American Mexico Line, bounties. 119, 120
favorable factors..
35
service....
120
Panama Canal act.
11,37
Swedish & Continental Shipowners Co.,
postal subventions..
postal subventions, amounts expended
120
for......
41, 42
service.......
120, 121
classes of contracts..
41
history
15,38
Taxation, exemption from, by Alabama……….
15
laws granting..
38, 40, 41
Austria..
Hungary
...
14,87
lines receiving.
15, 38, 40
14, 15, 88
result of law of March 3, 1891..
43
New York...
Washington.
Tonnage statistics, Argentina.....
15
rank among merchant navies..
30,34
15
228
registry of foreign-built ships... 11,34,35,36,37
ship-registry act of August 18, 1914
37
INDEX.
265
Page.
United States ships transferred to foreign
Veritas Austro-Ungarico..
registry not allowed to return to Ameri-
can registry...
34, 47
Vestervik-Libau Steamship Co., bounty.
Volunteer Fleet. See Russian Volunteer
Page.
89, 101
119
tonnage statistics..
32,33
Fleet.
United States & Brazil Steamship Co., sub-
sidized by Brazil
26
United Steamship Co. of Copenhagen,
Western Australia, State control of steam-
boat service.
74
steamboat services.
bounties....
73,74
108
subventions
dividends....
73, 74
110
purpose of bounties..
108, 109
Western Railway, preferential railway rates. 12,138
White Star Line, controlled by International
reimbursement of port dues by Den-
mark..
108, 109
Mercantile Marine Co. of New Jersey..
financial statement..
60
52
reimbursement of port dues by Bel-
not subsidized.
22
gium....
14, 21, 125
service...
108, 110
Zeeland Steam Packet Co., contract..
128
Union Steamship Co. of New Zealand (Ltd.),
postal subventions..
128, 131
contract.
69
service...
128
о