Manual of Ship Subsidies Part 8

[Footnote FH: Vice Con. Gen. E.G. Babbitt, Yokohama, in Con. Repts., no.

344, p. 216, May, 1909.]

[Footnote FI: j.a.pan Year Book, 1911.]

[Footnote FJ: U.S. Con. Gen. Thomas Sammons, Yokohama, in Daily Con.

Repts., no. 38, Aug. 17, 1910.]

[Footnote FK: j.a.pan Year Book, 1911.]

[Footnote FL: U.S. Amba.s.sador Thomas J. O'Brien, Tokyo, in Daily Con.

Repts., no. 123, May 26, 1911.]

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

[Footnote FN: j.a.pan Year Book, 1911.]

CHAPTER XII

SOUTH AMERICA

Brazil gives subventions from the Federal treasury to several foreign steamship companies, and some of the States of the federation also make similar grants from their treasuries. Besides the subventions to lines to foreign ports, the Government grants State aid to a considerable number of coast lines operating between Rio de Janeiro and other Brazilian ports. The total amount of the subventions in 1910 was equal to $1,437,880.[FO] The princ.i.p.al beneficiary was the _Lloyd Brazileiro_, maintaining the line between Brazilian ports and the United States.

Argentina is adopting a policy of giving subsidies to foreign steamship companies which extend her communications with foreign ports. As far back as 1865 a decree was issued offering a subsidy of twenty thousand dollars a year for a line between Argentina and the United States. But it was not taken. In 1911 the Government was prepared to pay a subsidy to a new steamship company promoted to furnish a regular service to South Africa.[FP] In 1911 there appeared the first steam vessel flying the American flag at Buenos Aires in twenty years.[FQ]

Chile grants mail subsidies, which have no appreciable effect in the merchant marine.[FR]

FOOTNOTES:

[Footnote FO: Con. Gen. George E. Anderson, Rio de Janeiro, in Daily Con. Repts., no. 55, p. 719, Sept. 7, 1910.]

[Footnote FP: Daily Con. Repts., March 18, 1911.]

[Footnote FQ: Same, January 20, 1911.]

[Footnote FR: Meeker.]

CHAPTER XIII

THE UNITED STATES

While a navigation code founded in 1790 and 1792, and developed in 1816, 1817, and 1820, after the model of the then existing English code,[FS]

has been retained in modified form through enactments in subsequent years, a system of general ship-subsidies, though repeatedly proposed, has never been adopted by the United States. From 1793 to 1866 bounties were given to fishing vessels and men employed in the bank and other deep-sea fisheries,[FT] but no subsidies to the merchant marine were granted till 1845, and these were only postal subsidies--payments in excess of an equivalent for services to be rendered in ocean mail-carriage. The law enacted that year had for its declared purpose the encouragement of American ocean steamship-building and running. With this act, therefore, the real history of Government aid to domestic shipping in this country begins.

At the time of the adoption of this policy America was still leading the world in ocean sailing-ships with her splendid fleets of fast-sailing packets and "clippers", while England had taken the lead in steamships.

The law of 1845 was the culmination of a move begun in Congress in 1841, the year after the first Cunarder had crossed from Liverpool to Halifax and Boston. Its aim was to parry England's bold stroke for maritime supremacy with her State-aided steamship lines, and directly to "protect our merchant shipping from this new and strange menace."[FU] The first move of 1841 was for an appropriation of a million dollars annually for foreign-mails carriage in American-owned ships.[FU]

The law of 1845 (March 3) authorized the postmaster-general to contract with American ship-owners exclusively for this service to be performed in American vessels, steamships preferred, and by American citizens, for a period of from four to ten years, with the proviso that Congress by joint resolve might at any time terminate a contract. The subsidy was embodied in the rates of postage thus fixed: upon all letters and packets not exceeding a half-ounce in weight, between any ports of the United States and any foreign ports not less than three thousand miles distant, twenty-four cents, with the inland postage added; upon letters and packets over one half-ounce in weight, and not exceeding one ounce, forty-eight cents, and for every additional half-ounce or fraction of an ounce, fifteen cents; to any of the West India Islands, or islands in the Gulf of Mexico, ten cents, twenty cents, and five cents, respectively; upon each newspaper, pamphlet, and price-current to any of the ports and places above enumerated, three cents: inland postage to be added in all cases. The postmaster-general was to give the preference to such bidder as should propose to carry the mails in a steamship rather than a sailing-ship. Contractors were to turn their ships over to the Government upon demand for conversion into ships of war, the Government to pay therefor the fair full value, as ascertained by appraisers. The postmaster-general was further authorized to make ten-years' contracts for mail carriage from place to place in the United States in steamboats by sea, or on the Gulf of Mexico, or on the Mississippi River up to New Orleans, on the same conditions regarding the transfer of the ships to the Government when required for use as war ships.[FV]

The next year, 1846, in the annual post-office appropriations act (June 19), provision was made for the application of twenty-five thousand dollars toward the establishment of a line of mail steamers between the United States and Bremen; and early in 1847 (February 3) a contract was duly concluded for a Bremen and Havre service, the first under the law of 1845.

This was a five years' contract entered into with the Ocean Steam Navigation Company, upon the basis of an earlier agreement (February 1846) with Edward Mills of New York, which Mr. Mills had transferred to the new organization. The subsidy was fixed at one hundred thousand dollars a year for each ship going by Cowes to Bremen and back to New York once in two months a year, and seventy-five thousand dollars a year for each ship going by Cowes to Havre and back to New York. The contractors were to build within a year's time four first-cla.s.s steamships of not less than 1400 tons, nor less than a thousand horsepower; and were to run their line "with greater speed to the distance than is performed by the Cunard Line between Boston and Liverpool and back."[FW] Provision for the subsidy thus called for was promptly made in this item in the post-office appropriation bill for the ensuing year, approved March 2: "for transportation by steam-ships between New York and Bremen according to the contract with Edward Mills, $258,609."[FX]

The next step was the enactment of a law which had for its declared objects "to provide efficient mail services, to encourage navigation and commerce, and to build up a powerful fleet in case of war."[FY] This measure, approved March 3, 1847, ent.i.tled "An act to provide for the building and equipment of four naval steamships," made provision for the construction, with Government aid, of merchant mail-steamships under the supervision of the Navy Department that they might be rendered suitable if needed for war service.

The act directed the secretary of the navy to accept on the part of the Government certain proposals that had been made for the carriage of the United States mails to foreign ports in American-built and American-owned steamships. These proposals had been submitted to the postmaster-general (March 6, 1846) by Edward K. Collins and a.s.sociates (James Brown and Stewart Brown) of New York, and A.G. Sloo of Cincinnati: one for mail transportation by steamship between New York and Liverpool, semimonthly, the other between New York and New Orleans, Havana, and Chagres, twice a month. The secretary was directed to contract with Messrs. Collins and Sloo in accordance with the provisions laid down in this act. These required that the steamers be built under the inspection of naval constructors and be acceptable to the Navy Department; that each ship carry four pa.s.sed midshipmen of the navy to serve as watch-officers, and a mail agent approved by the postmaster-general. Mr. Sloo's ships for his West India service were to be commanded by officers of the navy not below the grade of lieutenant.

The secretary was further directed to contract for mail-carriage beyond the Isthmus,--from Panama up the Pacific coast to some point in the Territory of Oregon, once a month each way; but this service could be performed in either steam or sailing ships, as should be deemed more expedient.[FZ]

All the contracts thus provided for were concluded the same year. Each was to run for ten years. The first executed was that with Mr. Sloo. It called for five steamships of not less than 1500 tons, and a semi-monthly service. The line was to touch at Charleston, if practicable, and at Savannah. The ships were to have engines by direct action; and each ship was to be sheathed with copper. The subsidy was fixed at two hundred and ninety thousand dollars a year, a rate of $1.83-1/2 per mile, the distance to be sailed out and back being 158,000 miles.[GA] Mr. Sloo immediately set over his contract to George Law, Marshall O. Roberts, and Bowes McIlvaine, of New York.[GB] The second contract was for the Pacific service, connecting with the mail by the Sloo line across the Isthmus. This was made with Arnold Harris of Arkansas. It provided for a monthly service between Panama and Astoria, Oregon, calling at San Diego, Monterey, and San Francisco, with a subsidy of one hundred and ninety-nine thousand dollars per annum. Three steamers were to be furnished, two of not less than a thousand tons each. Upon receiving the contract Mr. Harris immediately transferred it to W.H. Aspinwall of New York, representing the newly formed Pacific Mail Steamship Company.[GC] The third was the Collins contract. This stipulated for a semi-monthly service between New York and Liverpool during the eight open months of the year, and a monthly service through the four winter months, with five steamers, each of not less than 2000 tons and engines of a thousand horsepower. The first ship was to be ready for service in eighteen months after the date of the contract, November 1, 1847. The subsidy was fixed at $19,250 per twenty round trips, or three hundred and eighty-five thousand dollars a year, a rate of $3.11 a mile for sailing about 124,000 miles.[GD]

By subsequent acts the secretary of the navy was authorized to advance twenty-five thousand dollars a month on each of the ships called for by these several contracts from the time of their launching to their finish; and the date of the completion of the first Collins steamer and the opening of the New York and Liverpool service was extended to June 1, 1850.[GE]

At the same time that the secretary of the navy was executing these contracts the postmaster-general under the authority of an act "to establish certain Post Routes and for other purposes," also approved March 3, 1847,[GF] was contracting for a steamship mail-service between Charleston and Havana, with a subsidy of forty-five thousand dollars per annum. This contract was entered into with M.C. Mordecai of Charleston, who agreed to furnish steamships suitable for war purposes, and to perform a monthly service.[GG] Several other propositions for steamship service to various foreign countries were made to the postmaster-general at this time, but none was accepted.[GH]

The pioneer Bremen-Havre line began its service on the first day of June 1847, with two steamers. These were the _Washington_ and the _Hermann_, built in New York, strong and large, of 1640 tons and 1734 tons, respectively, side-wheelers, bark-rigged. At first they made the run to Bremen in from twelve to seventeen days, much better time than the average clipper.[GI] But up to 1851 they had no regular schedule of sailings, and, their speed being unsatisfactory, few mails were sent by them. The subsidy payments, therefore, were made for each voyage separately.[GJ] They had also ceased to command the patronage of travellers. Nevertheless, as a committee of the Senate in 1850 reported, they were believed to have been "profitable to their owners as freight vessels, and of essential service in promoting the interests of American commerce."[GK] The full service, with twelve trips to Bremen and twelve to Havre, was finally begun in 1851, when two more, and larger ships,--the _Franklin_ and the _Humboldt_, each of 2184 tons, were added to the Havre line. Four years before, the original company, because of financial difficulties, had organized a separate corporation for the Havre service. In 1852 Congress extended the contract to 1857;[GJ] and Southampton was made the point of shifting the mails.

The New York and Chagres, the Charleston and Havana, and the Pacific line, were all under way before the close of 1848. The Pacific line was the first in operation. The service began with the three steamers called for by the contract, the first sailing from New York on the sixth of October, the other two early in December. They were the _California_, 1050 tons, the _Panama_, 1087 tons, the _Oregon_, 1099 tons, all built in New York. The New York and Chagres line was started also in December with the sailing of the _Falcon_, 1000 tons, a purchased steamer which the Navy Department accepted temporarily, while the new ships were building, that the service might be immediately begun. The opening of the new territory south of Oregon acquired through the Mexican War, and the beginning of the rush of the "Argonauts" to the newly discovered gold fields of California, had made all concerned anxious to get these connecting steamship lines a-going.

At first the service was halting because of unavoidable circ.u.mstances.

The Pacific Company were unable at once to meet the demands. Sufficient or competent crews could not be obtained on the California coast during the gold excitement,[GL] at fever heat in 1849. But it was not long before more ships were put on, and the service improved and prospered.

By September, 1849, the Chagres company had their first completed ship in commission. This was the _Ohio_, 2432 tons, built in New York. By June, 1850, the second, the _Georgia_ (and the third of the line, for the _Falcon_ was retained) was running. Soon afterwards the _Illinois_ was added. At about the same time the Pacific company had added two more to their fleet--the _Columbia_ and the _Tennessee_. In 1851 the postmaster-general was authorized to increase the Pacific trips to semi-monthly; and the subsidy was increased. An additional contract (March 13) was then made with Mr. Aspinwall, as president of the Pacific Mail.[GM] This called for the enlargement of the line within a year, to six steamers; and for semi-monthly trips from Panama to Oregon and back, with stops and mail delivery at named points in California; and increased the company's subsidy by one hundred and forty-nine thousand two hundred and fifty dollars per annum. Thus the yearly total became three hundred and forty-eight thousand two hundred and fifty dollars.

Before the semi-monthly trips were begun, San Diego and Monterey were dropped for the regular service, to be served by a slower line.[GN] Also this year (1851) two more steamers were added to the fleet.

By this time on the Atlantic side the Collins Line was in promising operation. The service had auspiciously begun in 1850 with four of the five steamships called for by the contract. These were the _Atlantic_, 2845 tons, the _Arctic_, 2856 tons, the _Baltic_, 2723 tons, and the _Pacific_, 2707 tons, each some seven hundred tons larger than the measurement stipulated--"at least 2000 tons." All were built in New York ship-yards; were especially designed for fast sailing; and in size, model, finish, and fittings were p.r.o.nounced to be "such steamers as the world had never seen."[GO] In all respects they were superior to the Cunarders with which they were aggressively to compete; and it was the boast of the Americans that they would "beat the English in steam navigation, as they had beaten them in fast sailing." All a.s.sociated with the enterprise were of large experience in maritime affairs. Mr.

Collins, a native of Truro, Cape Cod, and long a shipping merchant of New York, had been at the head of fast clipper-ship lines--the New Orleans and Vera Cruz packet line, and the more famous "Dramatic line"

(the ships named for plays and players) of transatlantic sailers. The commanders of the steamers were all tried clipper captains.

The _Atlantic_ made the initial voyage, steaming gallantly out of New York harbor on the twenty-seventh of April, a month before the contract time for the beginning of the service. The _Pacific_ followed in June, the _Baltic_ in November, the _Arctic_ in December. They beat the Cunarders' time on the average by a day. Their popularity was immediately established. Their pa.s.senger traffic rapidly increased. But the severe condition of the mail contract, with their quick sailings allowing only short stays in port, made it impossible for the company to secure a profitable share of the freight business without a heavy outlay for slower cargo boats. Within a few months after the start of the line the Cunard Company had cut freight rates from seven pounds ten shillings per ton to four pounds. So, while the Collins ships continued steadily to outsail the Cunarders and got the bulk of the pa.s.senger traffic, the Cunarders got most of the freighting. Moreover, the Collins ships were far more expensive to run. Indeed, the cost of the rapid service was enormous. Mr. Collins stated before a committee of Congress that to save a day or a day and a half in the run between New York and Liverpool cost the company nearly a million dollars annually.

Accordingly more subsidy was asked for. This was granted in 1852, the act being stimulated by England's move late in 1851 in raising the Cunards' subsidy to 173,340 ($843,000), for forty-four trips a year: about nineteen thousand dollars per voyage. The extra allowance lifted the Collins subsidy to $853,000 for twenty-six trips a year, thirty-three thousand dollars per voyage, a rate of upward of five dollars a mile.[GP]

The compet.i.tion now became sharper. Still the Collins Line maintained its record sailings, and continued to beat the English. Then it was sharply checked by a grave disaster. On the twenty-fourth of September, 1854, the _Arctic_, when forty miles off Cape Race, rushing through a fog, was rammed by a French steamer, and sunk with three hundred and seven souls. This calamity had a depressing effect on the company's affairs. Two years later, in 1856, Congress determined to reduce the subsidy, and notice of the discontinuance of the extra allowance of 1852 was ordered.[GQ] Only a few weeks after this action another disaster, even more appalling than the first one, befell the company. On September 23 the _Pacific_ sailed from Liverpool for her homeward voyage with a full complement of pa.s.sengers; pa.s.sed to sea out of sight; and was never more heard of. She was replaced by the _Adriatic_, the fifth ship called for by the contract, which was launched the year before, the largest, finest, swiftest, and most luxurious then afloat; and the company struggled on against acc.u.mulating odds.

At length, in 1858, Congress abandoned the subsidy system and returned to the method of payment for foreign mail-carriage according to the actual service rendered, with a proviso, however, favoring American ships, such to receive the inland-postage plus the sea postage, while foreign ships were to have the sea postage only.[GR]

This was the final blow. The last voyage of the Collins Line was made in January, 1859. Then it perished. In April following, the ships were seized by the mortgagees and sold. So closed the career of the pioneer United States ship company in the transatlantic service. The splendid _Adriatic_ pa.s.sed to English ownership and the American flag gave way to the British. For several years this ship "held the transatlantic record with a pa.s.sage of five days nineteen hours from Galway to St.

John's."[GS]

Of the other subsidized lines, the ships of the Bremen service were withdrawn and laid up after the subsidy ceased. The Havre line continued a while longer with two ships that had replaced the _Humboldt_ and the _Franklin_, both of which had been lost,--the _Humboldt_ wrecked at Halifax on December 5, 1853; the _Franklin_ stranded on Montauk Point on July 17, 1854. Then with the charter of the two new steamers by the Government in 1861 for use in the Civil War, the Havre line also disappeared.