SHIPPING SUBSIDIES. 105 SHIPPING SUBSIDIES. 400) for its Australian service. The German East Africa company receives 1,050,000 marks ($392,700) for its services to Africa, and the German Government pays 1,000,000 marks to the North German Lloyd and the Hamburg-American lines for carrying the mails to America. The total mail subsidies to all lines amount to about 10,170,000 marks ($2.421,0.50). This is perhaps not an excessive amount lor the services rendered, but in addition the Government gives indirect bounties in the shape of exemption from import duties on materials of construction, and preferen- tial railway rates on iron, steel, and fuel used in shipbuilding and on many articles exported in German ships. These reductions in railway tarill's amount to from 30 to CO per cent, of the ordinary rates. The Germans generally feel that these direct and indirect bounties have been a good investment, and point to the fact that Ger- man shipping has developed very rapidly since the beginning of this policy of protection in 1880. The development of shipping is not, however, conclusive proof of the advantages of the sub- sidies, since numerous other factors have con- tributed to the growth of the German mercantile marine. The annual postal subsidies voted by France in 1001 amounted to nearly 27.000,000 francs ($.5,211,000). In addition to this the Govern- ment paid 5,850,000 francs (.$1,120,050) in bounties for construction and 12,300,000 francs ($2,373,900) in navigation bounties, making a grand total of 45,150,000 francs ($8,713,050). Furthermore, a bounty of 15 francs (.$2.89) per 100 kilos (220 pounds) is given for machinery and boilers biilt or repaired. There is no pre- tense that any of these subsidies are given for services rendered. It is the avowed purpose of all this bounty legislation to build up the French merchant marine, but there is no evidence that French trade has benefited bv this policy. In I'lOl Austria paid in "subsidies .$1,5.90,000, and Hungary $403,000. Russia pays consider- able subsidies, but they are mostly for internal commerce and for transjjort of troops, etc., by the volunteer fleet. Italy began a policy of bounties on construction and navigation in 1885. The Government in 1897 paid out 2,044.339 lire ($394,557) in navigation bounties and 124.973 lire ($20,260) in construction bounties. In 1897 Japan adopted the subsidy policy. In addition to heavy bounties on construction and naviga- tion, the Government of .Japan has since 1900 paid special subsidies of $1,331,000 to the Xippon Yusen Kaisha for its European service, and $325,707 for its Seattle line, and $504,912 for the Toyo Kisen Kaislin's line to San Francisco. Hol- land, Sweden, Denmark, and Xorway pay mail subsidies which arc no more than fair compensa- tion for services. Norway pays in addition $84,- 928 for facilitating steamer communications, and it is claimed that this enables Norwegian steam- ers to drive British vessels out of the trade be- tween Norway and England. Except for the bounties granted in 1792 to certain fishing vessels, the history of Government encouragement to shipping in the Ignited States begins with the act of starch 3. 1845. which pro- vided for the transmission of the mails in Ameri- can ships. An act nf March 3. 1847, authorized the Secretary of the Navy to accept the offers made by E. K. Collins & Company to carry the mails from New York to Liverpool and by Mr. Sloe for a mail service between New York and Chagrea. In 1848 two lines were started under subsidies — one from New York to Bremen, the other from New York to Havre. The most important sub- sidized line was the Collins Line, which began operations .lune 1, 1850. The original subsiily was $385,000 per annum for 20 voyages, or at the rate of $19,250 per voyage. At this time the Cunard Line was receiving about $30,000 per voyage. In 1852 the subsidy to the Collins Line was increased to $33,000 per voyage for 20 trips, ur $858,000 per annum. The competition be- tween the Collins Line and the Cunard Line was severe from the first. Previous to 1850 the Cunard had a virtual monopoly of the fast freight business. In a few months after the Col- lins Line started freights fell from £7 10s. a ton to £4 a ton. For a time the Collins Line had the advantage in the fight. But the loss of the Arctic in 1854 and the Pacific a little more than a year later seriously crippled the Collins Line. The Pacific was succeeded by the Adriatic, the finest and fastest steamship of that day, but it was impossible to retrieve such disastrous losses. In 1850 Congress reduced the subsidy to $385,000 per annum for 20 trips. Two years later all contracts for carrying the mails were abrogated and the Collins Line failed. The cost of this experiment was about $4,500,000. From 1848 to 1858 the United States Government expended a total of about $15,000,000 in subsidies without any manifest benefit to the American merchant marine, The L'nited States Government gave no further mail subsidies until 1800, when a line from New York to Rio de Janeiro was subsidized to the amount of $250,000 per annum. One year later the Pacific Mail Steamship Company was granted a subsid.y of $500,000 a .year for a month- l.y service to Japan and Cliina via Hawaii. In 1872 the company offered to double the service for an additional $500,000 a year. With some difliculty a bill authorizing such a contract was passed by Congress in 1873. It was after- wards discovered that the company had spent more than a million dollars to influence Con- gressmen to vote the subsid.y. As a result of this disclosure and of the subsequent failure of the company to comply with the conditions imposed, a new contract was abrogated b.y the Government. The Pacific JIail Company, during its ten .years of contract service, received $4,583,000 in subsidies. In that period there was no increase in the trade of the United States with the Orient that could not be traced to other causes than subsidized mail service, and the gen- eral merchant marine declined steadily. Under the act of 1891 the United States pays for carrying the mails on a mileage basis as follows: For first-class steamers, $4 per mile: second-class steamers, $2 per mile; third-class steamers, $1 per mile; fourth-class steamers, 60 2-3 cents per mile. Besides these contract prices the Post Office Department pays American ves.sels carrying mail $1.00 a pound for first- class matter and 8 cents a pound for other mat- ter. Foreign vessels carry'ing LTnited States mails are paid the international postal rates (44 cents and 4^0 cents per pound respectively). It will be seen that these payments constitute a very liberal subsidy to the mail steamers. In 1898 Senator Hanna introduced the first general subsidy measure designed to introduce a system of direct navigation bounties. After numerous
