— INEW-YOIIK DAILY ~ TRIBUXC. WEDNESDAY, MARCH 23, 1910.
*RUe and Fall of V. S. Shipping
Dh.v'L', FROM Th[ C-V MEERAL POSTAL SUBvLN^cs PCLICV OF FOR
tIGN TRADE RIVALS.
(Prem Th« Tribune Purr a* )
Washington. March 4.— Until the year 1840
'American ships, sail vessels, built, owned and
manned by American citizens and flying the, flag
of the- United States, absolutely dominated the
first class carrying trad* between the United
State; and Europe. try one of the sail packet
lines, carrying freight and passengers and cor
responding to the present first class steamship
line", v»aa American. As the British historian
Previous to th* development of steamships
the preponderance of shipping was falling rap
idly into the hands of American ship owner*.
Thirty years ago one of the great objects •>!
Interest at the decks in Liverpool was the
American sailing packet, and it was considered
that a stranger had missed one of the lions of
the port who had not visited these celebrated
ships. The same prestige was felt where;
on the Atlantic and Pacific oceans. In India.
China, and In all the best trades American
chips were most In demand. •>
This great shipping had been iroUt up under
a vigorous protective policy a dap kid In lTtf. by
which foreign ships arriving at American ports
were compelled to pay a tonnage tax of SO cents
a ton, while American ships paid only C cents,
and. moreover, the cargoes imported in foreign
ships were compelled to pay 10 per cent more
customs duty than if Imported In American
ships. There were especial and even heavier
discriminations against foreign and in favor of
American ships In the Important trade with the
Theffl discriminating duties had been relaxed
before ISIO. and entirely withdrawn in some
trader l>ut they had protected American ship
ping long enough to give it the complete mas
tery at Hi" ocean. Beaten In sail shipping, the
Hritr h government in 1839 began to protect
and encouras* steam shipping, then In Its in
fancy. A mail subsidy of $425,000 a year was
given '•• Samuel Cunard and his associates, to
establish a line of British built steamships to
Halifax and Boston. "It is beyond question,"
declares Professor James Russell SoJey, in the
•Jl.ir tir •■•■ Industries of America." "that the
MM paid to the Cunard company in its early
days, amounting to about 2» per cent per annum
vii the cost of the running plant, and subse
quently increased to $550,000. to $750,000 and to
1550.00% was clearly a subsidy; that It was
Civet) with the plain intention of establishing
firmly in English hands the transatlantic trade,
an-1 that it accomplished the desired result."
When the United States government gave a
nail subsidy to Mr. Collins, and created a line
of larger aiul faster American steamers, Mr.
Cnanrd acLed end obtained from the British
government a subsidy of $725.000 — afterward
Increased to about 5300.000— f0r a British line
from Liverpool to New York. In 1849 Mr.
«.*ur.ard testified before the Parliamentary Com
fsitieQ en Packet Contracts:
If ' bad got this contract three months sooner
(hare, would have been no American line.
Purpose of British Subsidies.
It i;:;s Leon asserted by extreme free traders
fat British ataajHMj subsidies are given pure
ly for postal purposes, and only to lines to
cclcr.i^l arts, But New York in 1849 was not
a colony of Great Britain. In 1841 the British
foverament gave a subsidy of ;i,;o<\OCO a year
)> create a line to the West Indies and Colon.
afterward extended under a subsidy increased
to 51,2:0.000 to Braxil and Argentina. At the
*r.:no time a subsidy of $225,060 was given to
toother British line on the west coast of South
America, v.liieh touched at no British port. In
!B.'i3 the ii > arli;unentary Committee on Contract
J*aoliets authoritatively stated the objects of
British mail subsidies as follows:
■fne obj; rts tvhich appear to have led to the
formation of these contracts, and to the larger
rxpciidUnrcfl involved, verc to afford us rapid,
frequent iiii'i punctual communication with dis
tant itort.-> which fred the main arteries of Brit
t?li commerce, and with the most important of
our foreign possesxioßSl to foster maritime en
terprise, anii to encourage the production of a
tnpetior class of vessel?, which would promote
the convenience and wealth of the country in
time of peace ar.d artist in defending its shore*
iiLJ'ii^t lio.-.tile aggression.
An Expert's Testimony.
Mr. J. Henniker Beaten, a member of the
British Parliament, formerly British Postmaster
Receral, nr.H the chitf authority in Great Britain
on po?t;il affair?, said a few years ego in a
letter to the Right Honorable 11. Cecil Rail.«-s,
if. p.. Postmaster General of Great Britain:
The r»ost office • 'If repudiates the suggestion
that the deficit caused by these enormous sub
: idics should he regarded as a deficit caused by
the «»r»»r.;tion'; of the department. The claim
th: t Uie Po;tofflre Departmewl should be
charged with the whole expense of this packet
or <H-ean service must be considered as barred,
by the simple fact that lew of tbe sail packets
■\vtre established either by the postofike or for
merely postal purposes', iheir expense far beyund
What BOCh requirement-* would justify.
To assume tliat those packets were really
established fur |>n"tot!ic • purposes is to charge
the govnv.n.enl with the most absurd extrava
im.ri» <?. The West Indian packets, for instance,
were established at a cost of £240,0*0 per annum,
tbongn Hi utmost return that was expected for
letters was £*i».000. leaving £200.000 clear deficit.
Mr. Ufa ton nlaa wrote In "rh Contompoiary
IJevirw' a trw years agu:
We pay annually al»out £T<»«.m»rt <«-.•> $3,500.-
M 0) a (present expenditures art- twice this), to
tl;e owner* of ■teamen that carry our nails.
Tim postal authorities treat this as so much
freightage paid for the tetter*. newspapers, etc..
in ta« mail bags; they deduct the postage re
ceived, and enter the balance as "loss on the
sea service." Tbere I* no lews; M la merely
another caso of mMM In th« accounts. Oar
government, liko others, wisely subsidises (we
must not say protects) our shipping trade to a
very largo amount MM thus encourage our
foreign and colonial trade, stimulate shipbuild
ing, and keep up cheaply a licet of swift cruis
ers, ready for employment in case of war.
It is true thess swift ships aJßoocarry the
mails. But at the highest possible computation
freightage on these mails couM only amount to
a small portion of the subsidies. The freight
age only nhnuU). therefore. be charged against
postage receipt*, and the "loss" would at once
disappear. Th»» balance, paid as subsidies,
should be candidly entered as subsidies In the
budget, as is done in every other country, and
as was. indeed, done in England down to ISGI.
To illustrate what is meant, it may be ob
served that we now pay 3 shillings a pound for
conveying letters to America In British ships,
such as the Majestic, while wo pay only 1 shill
ing t pence a pound for tetters to America sent
In the equally good North German Lloyd or the
Inman (American) steamers such as the City
The C- « ''' and Co!lin3 Contest.
The British subsidy to the Canard Lin" was
deliberately increased in the years before the
Civil War to destroy the Collins Line and Amer
ican steam competition on the North Atlantic
As Senator James Ashton Bayard, of Delaware.
father of Thomas Francis Bayard, said la a
debate In Congress on the Collins subsidy, in
1 am willing to trust American skill and In
dustry in competition with any people on the
globe, when they stand nation to nation, with
out government Interference. But If the treas
ury of a foreign nation is poured into the lap of
Individuals fur the purpose of destroying the
interests of my country or for building up a
commercial marine at the expense of the corn
men* and prosperity of the United States. I
for one will count no cost in counteracting such
government action on the part of Great Britain
or any foreign power.
It Is a matter of history how, In the fierce con
test in Congress over slavery In the years be
tween 1352 and 1158. the mail subsidies to
American steamships running chiefly from
Northern ports, were withdrawn at the dicta
tion of Southern Democratic leaders then su
preme In Washington, aided by a few men from
the agricultural West. Many liberal Democratic
statesmen, however, resisted to the lasf this
deliberate destruction of American sea power,
so clearly portrayed by Senator Bayard, of Del
When the postal subsidies were withdrawn by
Congress the American steamship managers
tried bravely to run on without them. But they
could not withstand the Cunard subsidy of
almost 1*00.600 a year, and one by one Amer
ican steamships in the European trade were
driven off the passage. Commodore Vaaderbiit.
the ablest steamship manager of his time, built
come splendid new steamships and tried to run
to Europe without a subsidy, but failed because
he could not meet the power of the treasuries of
foreign government*. Mr. Richard Cobden. tes
tifying before the Parliamentary Committee on
Packet and Telegraph Contracts, declared that
the American steamships "ceased because the
American government withdrew the subsidy.**
Another British free trader, Mr. Wilson, before
the same committee said:
In the face of these Increasing (British) sub
sidies the American government has altogether
relinquished the practice of subsidising their
vessels, and their vessels, of course, have been
driven off the passage.
This was In the year 1859. Another and a
modern British view of the cost to the United
States of the destruction of the American postal
subsidy system before the Civil War is given
by Mr. Henniker Ileaton. M. P.. in "The North
American Review" for October, 1894:
As American shirs were not subsidized, their
owners could not compete with the Cunard and
otli» r companies, the art of shipbuilding lan
guished, and the American carrying trade was
transposed to foreign bottoms. In 1831 only 13
per cent of the exports from the United States
were carried in American ship.*, which at one
time had engrossed »o per cent. As a conse
quence of refusing $5,000,000 a year in subsidies
during thirty years to native shipowners, or
SI^O.GoO.GuO. the United States had to ray in the
same period not mm than 53.000.000.000 for
freights, while their mercantile marine dwindled
Mr. Elaine to Mr. Gladstone.
The lion. frsma G. Baals* In Mi celebrated
reply to Mr. Gladstone in 1830, eahl:
It will not escape Mr. Gladstone's keen obser
vation thai British interests in navigation flour
ished with lefts rivalry and have increased in
greater pror-orton than any other of the great
interests of the United Kingdom. I ask his can
did admission that it is the one interest which
KugUnu has protected steadily and determined
ly, regard Iras of consistency and regardless of
expense. Nor will Mr. Gladstone fail to note
that navigation is the \>e:.ke*t of the. great
interests of the United States, becaure it Is the
one which the national government has consist
ently refused to protect.
Or, as Mr. Blame said in his List speech in
the I'nited States Senate, on January 27, istl.
replying to Senator Beck, of Kentucky, who was
arguing for free shfps:
It Is a fact equally remarkable that for the
last twenty-five years, or make it only for the
last twenty years, from the beginning of the
war to this hour, the Congress of th«» United
States has not don* an* solitary thing to uphold
the navigation interests of the United States.
Decay has keen observed r.olng on steadily from
year to year. The great snaren forward ef our
commercial rival of old ha.«r keen witnessed and
cvrrvwlxire recognized, and tfce representative
of the £2*}** **• United States have sat m
their two bourcs or legislation as dumb a-<
though they could not speak, and) have not of
fered n. Elnjclo remedy or a slmjls aid. . . .
-^flJ'L I*"*1 *"* *** In which Cmmr— has not
stepped forward to do ens thing for the foreign
commerce of thU country, for aH that vast
external transportation wkose Importance the
Senator from Kentacfcy ass not ««amjerated, but
has strongly depicted, the same Congress has
paas*d ninety-two acts in aid sf Internal trans
portation by rail; has given 2C0.C00.C00 acres of
the public lands, v/orth to-day a thousand mill
ion dollars la money, and baa added VJe.eM.OM
In cash, and yet. I repeat, it has tended th«
aid of scarcely & single dollar* to build up our
Rear Admiral Bedford Pirn, one of the greatest
of British authorities on maritime affairs, has
It has been the policy of the British govern
ment to establish or. rnther, to encourage the
establishment of British steamship lines by the
annual payment of a postal subsidy, and this
with tho most gratifying result as regards the
expansion of British commerce. I know of no
instance of a British postal line of steamers
originally established without a subsidy for car
rying the nails.
British Subsidies Not Paid to Foreigners.
** *i-»fi vjuus> j . . i* . r^sx (j \r r"O f irjn^r^,
It la often ■surfed by American free trader*
that tbe British government awards Ms steam).
ship subsidies to the lowest si ml ■ ■ That Is
m^r emjmpsmpmj UP UPJ IVWWV ■wVsßmaTmV *•••• ■••
exactly the policy also of the United States. But
the British government dees not award Its postal
subsidies to foreigners if they are Ike lowest
bidders. In this matter Great Britain m the
meet rigid and uncompromising of protection
ists. Thirty years ago a lino French postal line
of steamers to the Far "East, the -Messagerles
Imperial**.- offered to convey the Britl3n mails
to Asia for a mere fraction of the enormous sum
of ; 1,300.000 a year which the British Peninsular
and Oriental Company was receiving for this
service. The very idea of sending British mails
and paying British postal money to foreign ships
was scouted In the House of Commons, Mr.
Crawford, for example, said:
Now, what 1 desire to ds on this occasion k*
to protest, in the name sf what 1 consider to be
the interests of tks c a—try and the interest sf
commerce, and in justice to our own companies,
against the ships of the "Mcssageries Imperi
ales" or of any other foreign company, seine
employed In the conveyance of our ft lira
malls. (Laud ckeers from aH parts sf the
hawse.) You may carry tbe principle sf econ
omy too fsr. (Hear, near!) Such a course sf
proceedings would be free trade gone mad. . . .
I think it hi rather too much to expect that the
interest* of this country, commercial, social and
political, should be made to depend upon the
good win ef any foreign nation whatever. (Re
This policy so aptly described as "free trade
rone mad" was thereupon left by the British
Parliament to protectionist America.
In ISS7 the question again came up In Par
liament for tbe renewal of tbe mail subsidy to
the Peninsular and Oriental Steamship Com
pany of $1,325,000 a year for ten years for ear
ning the mails to India and China, at a speed)
varying from 112 to 12.3 knots. Informa
tion was laid before the House sf Commons
that French and German stismshlps sf supe
rior speed were willing to convey the mails
for "from one-fourth to one-half less postage"
than the British steamers. This proposition was
vehemently rejected. Mr. Ooshen. lon* Chan
cellor of tbe Exchequer, declaring that the ser
vices for which the British Peninsular and
Oriental Company was subsidized were "ser
vices which are postal m one sense, kwt which
are undertaken partly for political, commercial
and other objects." And Postmaster General
1 think that If the honorable member only
too!: the pains to study the course of public
opinion he Mould find that a contract with the
North German line or the Messagerlea Marittanea
would have a vejry slight chance o.' being adopt
ed by the House of Commons.
The subsidizing of foreign ships Is a policy
which Is seriously advocated nowhere except in
the United States. There Is one line of Ameri
can steamships running across the North At
lantic from New York to Southampton. Thes
four American steamers are the St. Louis, the
St. Paul, the New York and the Philadelphia.
-It- knot ships, conducting a weekly service
throughout the year. When this line was estab
lished twelve years ago it was th.> only 20-Unot
weekly service on the North Atlantic, and it
remained the on»y weekly service of this speed
for several years thereafter. There were only
two British steamships that were as fast. Yet
In spite of the fact that this American line was
performing the swiftest and best service, the
British government systematically boycotted
these American steamers in the matter of ocean
mails, allowing only letters especially addressed
for these ships to be sent out by them from the
postoffice at London, and paying a very small
rate for this service.
At the same time the British government dis
patched nearly all of its mails by British steam
ers of the Cunard and other line?, all but two
of them slower than the four American ehii>».
These British steamers earning British mails
often arrived at New York two or three days
behind the swifter American ships, it often
happened that goods consigned to New York
merchants by the American ships reached the
piers two or three days before the bills of lading
sent by the slower British steamers— to the
great Inconvenience of the business men of New
York, who vainly remonstrated time and time
again against this excessive favoritism of the
British government to British steamships.
In 21)00 tut British government paid cc?} $10. -
5U In mall pa 7to tHa four fast Am^ cai
liners, though tho American government «--,
$2i:r.C*X> to do Bteamcra cf the British Whjl
Star Line, JICB.OCO to the North Cermaa ij, %
$101,000 to the British Cunard Une. VWjdJ.
the ITamlmrg-American Una and ICQ.djO'to to
FSrcncft company. Tho United States sfi VfjM •
preference to American ships and pays tj^
more than foreign ships for mall service. JSnt
it doea not boycott foreign ships when they 3
fast and suitable. In this respect th« Unj..^
States follows a policy of genulno reciprocity
■ " m • IfwUKf PiS|VMpfM w
which Great Britain does not reciprocate. w^t e
tho British government follows a policy not c*
•• trade, bet off protectionism gone mad.
Many British Steamships Now Subsided.
Tie British covernment since I*lo has as.
[panted between |2SO.OI)r».<MN» and ftGOccoom
in et«amshi» subsidies. These subsidies
: now paid to about thirty line* of «teaia?r2
Colonial governments contribute largely en ikss*
own account to the extension of British stetM
, ship service*. In many ca?es the British svr.
; erament has been able to reduce the postal ■
' sidles to certain lines when they havo becoic.
I thoroughly established. Take, for Instance, £
I case of the Royal Mall Steam Packet Comh
; running to the West Indies and the east eoS
lor South America. Tki» line was crigsalN V
tablished in ISII by the payment eiTsuiZ
of $1,200,000 a year. Increased •••• afte^t?
i .11X50.000 a year because the company »-
fallen Into dlfflculUea through the loss by wail
of seven or eight ihlcs in quick «ncccs3loa. ij^
! Incxcaso of aukflMy was also In consltleratlca «•
j an extension d the service to Brazil and a-.
gentina. The subsidy remained at $I.KO;GfO
for many years, but when tho company bstss*
thorenshly ■ataaltaktj. and) especially wkn
American competition was killed off, the saw
sidy was gradually reduced to) succeeding co.
! tracts to between fiOO.CCO and £XO.MO. ti
other easest though subsidies to various Uses
have remained tho same, the British covernaes;
has succeeded in getting larger returns on the
! money in the way of Increased frequency c*
sailings, higher speed or larger steamships mere
! valuable for naval reserve purposes. in vert
few cases has a British subsidy failed to estab.
| uab the steamship line on which it was bs>
Recent conspicuous cases of British mbsidla
are the line from Vancouver. B. C. to Japm
and China, which Hon. William C. Whitney de
scribed In one his annual reports as Secretory
of tHe Navy as "a notable Illustration of tm
generosity and courage with which EnjUai
pushes her shipping Interests." This British
line across the North Pacific receives $£>!.<**
a year ft em Great Britain and Canada—
from. Great Britain— for three Iff- knot steamers
of rather small size. Another recent British
subsidy m £MX).CCO a year, given in 1900 to tm
Elder-Dempster Company, to create a Une cf
four It-knot steamers from Jamaica to Great
Britain, in competition with a line of four 13.
knot American steamers between Jamaica ml
the United States, receiving a subsidy of * 130,.
CCO a year under the ocean mail law of mja.
The British steamers received $1 SO a mile, _,
against a maximum American rat. of $1 15.
Most conspicuous of all. of course, in recent
British subsidy practice is the new crvtratt
with the Cunard company, by which the Cttttt
government loaned from the public treasury to
construct two new steamers of superior speed
the sum of $13.C00.0j0. at the low interest of 2^
per cent, the government at the same time en
gaging to pay for these two .hips and two ex
latins; steamers a subsidy of $1,100,000 a year
for twenty years— a subsidy sufficient to repay
the loan and Interest.
It Is often asserted by fr»e traders this
eapptry that only 2 per cent, or at most only 1
per cent, of British steam-hips are subsidized
This statement is not true. Captain
W. Bates, former Commissioner of NavigatUs,
states on page 3U6 of his "Am«ritan Marin*'
that the tonnage of British steamers fining
subsidy or .subvention in IX*"J wa
cent of the total of British -'team tonnage, ast
that the tonnage of th>- companies reeemtoj
ssjrk support »v 17.8 C pea eawl of the tats)
British steam tonnage.
But this is, aft:r all. a minor consiu>ratie».
The really vital fact pi that Great Britain for
some years after 1840. in tho very beginning of
the development of steamship building subsi
dized all her steamships^ — first and
following the policy most generously and iocs!
persistently. These subsidies at that tine ere*
ated shipyards and engine and boiler work*
which never would, have been created, witktaj
government aid, and which put Great Britali
years in advance of her competitors. Tace>
■tan—hip yards thus developed turned their at*
tention to building freight steamers not sub
sidized, so that Indirectly the British tramp Cat
of to-day is a product of the subsidy sysMa
Moreover, it cannot be denied that although
ocean mail subsidies are necessarily paul to a
relatively few lines of swift, superior steamers.
yet they have indirectly a beneficial effect as**
the whole body of a nation's merchant shippiaf.
for all maritime history proves that these ocean
mail lines are the very backbone of commerce.
They create and expand trade in which, for tfce
carrying of the cheaper ami bulkier commodi
ties, cargo vessels of low speed have th*ir op
portunity. There is probably not ens subsidized
ocean mail line of any important under any
(las which had not found it necessary in onkr
to handle its business to construct an <iii»iaai>
tunsaz? si unzubsidizeil cargo st'.-amers.
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