Page:The New International Encyclopædia 1st ed. v. 18.djvu/136

* SHIPPING SUBSIDIES. 104 SHIPPING SUBSIDIES. of money. Certain it is that the service ren- dered by the Peninsular and Oriental Company was mueh less expensive and infinitely more efii- cient than that of either the East India Com- pany or the Government post-oflice 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 case seems to havfe 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. Tlic bounty kept the com- pany solvent for some years, but the trade was insufficient to justify such a service and eventu- ally the company failed. The Galway Line pre- sents another case of the tendency of subsidies to carry the creation of facilities for trade further than circiunstanees really warrant. Tliis com- pany contracted, in 1800. to carry English mails from Galway to Portland, Boston, or New York via Newfoundland, agreeing to deliver dis- patches in six daj's. 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. The following table gives the subsidized lines and the amount of mail subsidies paid by the British Government in 1901 : SEBVICE Company Yearly payment Dt>ver and Cafals (daify) London, Chatham, and Dover R. R. Co £26,000 330,000 86,000 Halifa.'; to Yokofiama, Sfianghai, and Houg Kong- Canadian Pacific R. R. Co 60,000 Siiiitliaiiipton to West Indies (rortniglitI.v) Atlt'ii tu Zanzibar (mo-ntfilj) Liv.Tii.ic.l to .S. .4merica and Fatliland Is. (fortnightlj-)... SO.OOO Britisfi India Co 9,000 32,600 135,000 Southamptou to New York (one wa'yonly, semt-weelcl.v).. Cunard and White Star Cos. * Total 117,655 £874,156 • A new contract (1902) with the Cunard Co. grants a fixed subsidy of £160,000 a year in place of the payment according to weight of maiis as hitherto. commerce would warrant — a policy naturally in- volving expense — but b.v a proper watchfulness, the Post Office authorities kept the subsidies within reasonable limits. The mail business probal)ly paid no higher profits than other traf- fic, and at times it must have paid less, for the company did not wish to renew the con- tracts, and at one time tried to abrogate them. The Royal West India Mail Steam Packet Company is another line which has drawn heavy subsidies from the British Government. It was founded in 1841 and w-as granted a subsidy of £240,000 for traversing a distance of 084,816 miles every year. There was no advertisement for bids, and no revision of the extravagant terms of the contract until 1874. There was lit- tle freight and less mail to be carried, and, in spite of the large subsidy, the company lost about £80,000 the first year through inefficient or dis- honest management. The second year the Gov- ernment reduced the mileage to 392,973 miles, leaving the subsidy as before, and granting new favors. It appears to be clear that the advan- tages secured by this particular subsidy were not commensurate with the expenditure involved. Without doubt a better service could have been secured at much less expenditure. The service was slow, irregular, and unsatisfactory, and in some years the amount paid in subsidies ex- ceeded the postal receipts of the line by £183,938. The most palpable case of the use of mail sub- sidy to aid in the extension of British commerce was the Pacific Steam Navigation Company, which was given a subsidy in 1840 for carrying the mails between the ports of Central and South Besides the above mail payments, a subsidy of £40,000 per annum is paid for the service to Jamaica, as the outcome of the recommendations of the West India Royal Commission of 1896-97, to encourage the fruit trade of the West Indies. This is the only example of a subsidj^ granted by Great Britain expressly to encourage trade. Opinions differ as to whether the British postal and Admiralty subsidies liave resulted in direct advantages which justify the outlay made by the Government. Jlr. Buxton Forman of the British Post Office gave it as his opinion that this is not always the case: Sir Spencer Walpole, former Secretary of the Post Office, thought full value is received. No careful statistical inquiry with regard to this question has ever been made, nor is it possible to make one. The open bidding on mail contracts does not at all secure service at cost, because there is nothing like free com- petition among steamship companies. Careful observers, however, agree that the British postal and Admiralty subsidies do contain an element of genuine subsidy for the encouragement of Brit- ish shipping. This belief is strengthened by the refusal of the British Government to let the mail contract to the White Star Line after its pur- chase by the Mercantile ISIarine Company in 1902 imtil full assurance was given that the White Star Company would remain a thoroughly Eng- lish concern. The policy of other European eountricB is quite difTerent from that of Great Britain. Ger- many pays an annual sulisidy of 4,000,000 marks (.$9.52.000) to the North German Llovd for its East Asian service, and 2,800,000 marks ($666,-