Manual of Ship Subsidies Part 3

Unforeseen results of an unsatisfactory nature followed the application of this law. Professor Viallates effectively states them in the fewest words:

"To be sure of profiting by the advantages of the law the ship-owners hastened to order vessels and to place them on the stocks. Their haste increased when it was seen that there existed a considerable discrepancy between the allowed tonnage and the money appropriated. The appropriation of one hundred and fifty million francs, opened to a.s.sure the payment of the navigation bounties and the compensation for outfit, was much too little.

The rush was such, as soon as this formidable mistake was discovered, that, less than nine months after its promulgation, from December 20, 1902, the useful effect of the law was completely exhausted."!

Thereupon resort was had to another Extra-Parliamentary commission to frame another system. The result was a law of 1906 (April), which separated the shipbuilder from the shipowner. The provisions for the construction bounty were redrawn with the object, as Professor Viallates explains,[CC] "not only to equalize the customs duties affecting the materials employed, but also to give the builders a compensation sufficient to enable them to concede to the French shipowners the same prices as foreign builders." The rates were thus fixed on gross measurement: for iron and steel steamships, one hundred and forty-five francs per ton; for sailing-ships, ninety-five francs per ton: these bounties to decrease annually to four francs and fifty centimes for steamships and three francs ninety centimes for sailing-ships during the first ten years of the law's application, thereafter to stand at one hundred francs and sixty-five francs, respectively; for engines and auxiliary apparatus, twenty-seven francs fifty centimes per hundred kilograms. The navigation bounty to owners of French or foreign-built ships under the French flag, was calculated per day of actual running: for steamships, four centimes per ton gross up to 3000 tons; three centimes more up to 6000; two more to 6000 and above; for sailing-ships, three centimes per ton up to 500 tons, two more up to 1000, and one more to 1000 and above. This bounty to continue for the first twelve years of the law. The provisions for fostering speed development in steamships excluded from compensation those making on trial, half laden, less than nine knots, in place of ten in the previous law; reduced the rate to fifteen per cent of the bounty for those showing more than nine and less than ten knots; and increased this rate by ten per cent for those making at least fourteen knots, by twenty-five per cent for fifteen knots, and thirty per cent for sixteen knots. The extra bounty equal to twenty-five per cent of the regular navigation bounty to steamships constructed on plans approved by the Navy Department, and the provision making all merchant ships subject to requisition by the Government in case of war, were retained as in previous laws.[CD] This is the law at present in force.

The total cost of the French bounty system in the twenty-four years from its establishment with the law of 1881 to 1904, when the law of 1902 had practically run out, was in round numbers upward of three hundred and eighty-one million francs. Professor Viallates shows that the new law of 1906 would absorb during the first seven years of its application, upward of eighty-four million francs.[CE]

These construction and navigation bounties are exclusive of the subventions to steamships for carrying the mails. The establishment of the French postal ocean steamship subsidy system dates back to 1857, when a contract was made with the Union Maritime Company for a service to New York, Mexico, and the West Indies. The a.s.sertion is made by Professor Meeker that the French postal subventions paid "ostensibly for the furtherance of the mails," are "both greater in amount and more influential upon shipbuilding, navigation, and commerce than are the general premiums upon shipbuilding and navigation."[CF] Says Viallates:

"The system is calculated to secure regular and rapid postal communication with certain countries beyond seas, and at the same time to const.i.tute an auxiliary fleet capable of being utilized by the navy in times of war. The existence of fixed lines with constant service is also a means of favoring the expansion of the national commerce. The State obtains, moreover, in exchange for the subsidy, direct advantages; the free carriage of the mails and the funds of the public treasury; transport of officials at a reduced price, and of arms and stores destined for the service of the State."

Meeker:

"The greater part of the concealed subventions undoubtedly goes to the shipbuilders, for all mail contract steamers must be built in French yards and of French materials. These first costs are estimated to be from twenty-five to fifty per cent greater in France than in England."[CG]

There is no compet.i.tion in the letting of the French mail contracts.

They go to four steamship concerns. For many years more than one half of the total steam tonnage of France has been owned by these four subsidized lines: the _Compagnie Generale Transatlantique_, the _Compagnie des Messageries Maritimes_, the _Chargeurs Reunis_, and the _Compagnie Fraissant_.[CG]

The great ship-yards have developed a capacity for building steamships of the largest cla.s.s. The tonnage since 1881, when it had fallen to 914,000 tons, had increased only to 1,052,193 tons in 1900. By 1910-11, it had reached 1,882,280 tons.[CH] The total mail subsidies average, in round numbers, five million dollars a year, while the construction and navigation bounties amount to three and a half million dollars additional.

Practically every French vessel floating the French flag and engaged in foreign trade either receives or has received subsidies, or bounties, from the Government.[CI]

FOOTNOTES:

[Footnote BD: Meeker.]

[Footnote BE: Lindsay, vol. III.]

[Footnote BF: Rear-Admiral Alfred T. Mahan, "The Influence of Sea Power upon History," pp. 105-107.]

[Footnote BG: Mahan, p. 73.]

[Footnote BH: Lindsay, vol. III.]

[Footnote BI: Prof. Achille Viallates, "How France Protects Her Merchant Marine," in North American Review, vol. 184, 1907.]

[Footnote BJ: Lindsay, vol. III.]

[Footnote BK: Lindsay, vol. III, also Viallates.]

[Footnote BL: Viallates.]

[Footnote BM: Lindsay, vol. III, pp. 457-458.]

[Footnote BN: Viallates.]

[Footnote BO: Meeker. Also Wells, pp. 163-164, _note_.]

[Footnote BP: Wells, pp. 163-164, _note._]

[Footnote BQ: Meeker. Also Wells.]

[Footnote BR: Wells, p. 164.]

[Footnote BS: Meeker.]

[Footnote BT: Viallates.]

[Footnote BU: Meeker.]

[Footnote BV: For this law see Meeker.]

[Footnote BW: U.S. Consul Robert Skinner, Ma.r.s.eilles; Con. Repts., xol.

XVIII (1900), p. 36.]

[Footnote BX: Viallates.]

[Footnote BY: Meeker.]

[Footnote BZ: North American Review, vol. CLx.x.xIV, 1907.]

[Footnote CA: Embracing voyages within the limits of the ports of the Mediterranean, North Africa, and Europe below the Arctic circle--Meeker.]

[Footnote CB: Meeker and Viallates, summaries of this law.]

[Footnote CC: North American Review, vol. CLx.x.xIV, 1907.]

[Footnote CD: For this law see Senate Doc. no. 488, 59th Cong., 1st sess.]

[Footnote CE: North American Review, vol. CLx.x.xIV, 1907.]

[Footnote CF: Meeker.]

[Footnote CG: Meeker.]

[Footnote CH: Lloyd's Register, 1910-11.]

[Footnote CI: Senate Rept., no. 10, 59th, Cong., 1st sess.]

CHAPTER IV

GERMANY