SHIPPING SUBSIDIES. Pecuniary aid to shipping by public grant. The terms bounty and subvention may be employed in the same sense. The first direct bounty in aid of shipping of any kind was granted in 1730 by the 3d George 11. (e. 20, § 9), which provided for a bounty of 20 shillings per ton on all vessels of 20 tons or over engaging in the white herring fisheries. The object of these fishing bounties was to en courage the fisheries, which served as a training school for mariners for the British war fleet. The bounty laws were modified from time to time until they were finally repealed in 1867. It was not, however, until 1839 that thy ]English Government began the policy of paying subsidies for 'mail service.' in that year Samuel Cunard made a. contract with the British Board of Ad miralty, by which he agreed to establish a fort nightly mail service between Liverpool and Hali fax for a yearly payment of £60,000. The New World terminal was afterwards changed to Bos ton and then to New York. In 1841 the amount of the subsidy was increased to £80.000 and the number of vessels increased from 3 to 7. The subsidy was again increased in 1848 to £145,000, but was reduced to £80,000 in 1868, after the failure of its chief competitor, the Collins Line. Since that time the amount of the annual subsidy has varied greatly in different years. In 1570 the amount of the subsidy for the transatlan tic ocean mail service was made to depend upon the weight of the mail matter transported. the contracts being given to the Cunard and the White Star lines.
The subsidies were given with the two-fold pur pose of establishing quicker and better mail com munications with America, and of encouraging a rival to the American clipper lines, which were rapidly driving the British ships out of business. When the United States Congress passed the bill giving a subsidy to the Collins Line in 1848, the 'British Government raised the subsidy to the Cunard Company by £65.000, without requiring any additional services, showing that the Brit ish Government was not solely bent on obtaining a quicker mail service. The subsidy undoubted ly gave the Cunard Company a great advantage over its competitors. Whether, as is often al leged, the subsidy really helped to establish steam navigation is more than doubtful. The Great Western Company was in the field before the subsidized Cunard Line. It is highly proba ble that the subsidy rather retarded than has tened improvements, since it enabled the Cunard Company to earn profits without maintaining the highest standard of etlieiency.
In 1868 the Cunard Line received £80,000 as a fixed subsidy, while the Inman Line received £22.161, the North German Lloyd £9,504, and the Hamburg-Ameriean £3,343, paid according to the weight of mail earried. The next year the Cunard received £80.000 for its service twice a week, and the Inman £35,000 for a weekly ser vice. The contracts were drawn for seven years. A Parliamentary eommission investigated them and recommended that they be disapproved, but the Government did not act upon the recommen dation. In 1870 the Postmaster-General intro duced the system of payment by weight through out, by which the English lines were paid 4 shil lings per pound for letters and 4d. for papers, and the North German Lloyd 2s. 4d. for letters and 2d. for papers. In 1887 the rates were re duced to 3s. for letters and 3d. for other mail, the Cunard and White Star lines to carry all mail except specially directed letters. These rates are about times the international pos tal rates, so there is still a subsidy of about £75,000 to the Cunard and White Star lines, not counting the admiralty subventions, amounting to £42,000, which are paid for the privilege of hiring or buying certain of the faster steamers in case of war.
The Peninsular Collipany, in 1837, began the carriage of mails to and from Spain and Portu gal for an annual payment of £29.600, which was soon after reduced to £20,500. The next year the company took the eontract of carrying the mails between England and Alexandria for £34.
2200 per annum. In 1542 it became the Penin sular and Oriental Company and took over the service from Suez to Calcutta with a yearly sub sidy of £115,000. or about 20s. per mile. The service was soon after extended to China, with an addition of £45,000 to the yearly subsidy at the rate of about 12s. per mile. The East India Company continued to carry the mails between Bombay and Suez for a yearly subsidy of £105,200, or 30s, per mile. In 185S the Pe ninsular and Oriental took over the service for 124.700 and rendered a much quicker and more regular service. In l852 the Government adver tised for bids for a mail service to Australia. The Peninsular and Oriental offered to perform the Australian service, together with all other contracts, for £199,1100 per an to he reduced by £20.000 on the completion of the railroad across the peninsula of Suez. This gave a more extended service for £76,000 less than was of fered by the only competitoi yet there was much complaint of favoritism shown by the Gov ernment to the Peninsular and Oriental During the Crimean War the British Govern ment chartered eleven of the Peninsular and Oriental vessels for transport service. This so crippled the company's fleet that they were com pelled to give up the service between Australia and Singapore. After the war the contract for a monthly service between Australia and Suez was let (1857) to the European and Australian Steam Navigation Company for 1155.000 per year, but the severity of the terms and the in efficiency of the management made the enterprise an utter failure, involving the loss, in one year, of the entire capital of o00,000 and a further debt of £270.000. The Peninsular and Oriental, for a yearly compensation of then took the service, including a service to Alauritius and Aden. The latter line was soon given up and the subsidy was reduced to £134,672. In 1866 the service was made semi-monthly and the sub sidy increased to £170.000, and four years later a new contract on all the Peninsular and Ori ental lines was made, with an annual subsidy of £450,000. Since that time the amount has been steadily decreased until, in 1S9S, it was 1330,000. It is a disputed question whether the mails could have been carried for a less expenditure of money. Certain it is that the service ren dered by the Peninsular and Oriental Company was much less expensive and infinitely more effi cient than that of either the East India Com pany or the Government post-office packets. No doubt the company made substantial profits on the Government service, but that there was no secret connivance with Government officials to secure a monopoly is shown by the attitude of the Government toward the company throughout. Every contract was thrown open to public com petition, which in this ease seems to have been more than a mere form. If at times the subsi dies appear to have been exorbitant, we must con sider the urgent necessity to Great Britain of keeping up communications with her colonies, es pecially India, the tremendous difficulties to be overcome, and the severe governmental require ments. The subsidies gave England the commu nication she needed earlier than the growth of America. No British ports were touched by the service, and the amount of British mail carried was almost nothing. The bounty kept the com pany solvent for sonic years, but the trade was insufficient to justify such a service and eventu ally the company failed. The Galway Line pre sents another ease of the tendency of subsidies to carry the creation of facilities for trade further than circumstances really warrant. This com pany contracted, in 1860. to carry English mails from Galway to Portland, Boston, or New York via Newfoundland, agreeing to deliver dis patches in six days. They built four new vessels, but none of them came up to the requirements of strength and speed. One was lost and two others disabled. The company failed and in volved all the investors in ruin.