SHIP SUBSIDIES

These aro pavments or bounties made by governments to a ist private enterprise in developing sea commerce. Such favors take 3 variety of forms. They may be based on a ve el’s sailings in a year, the mileage it covered, its tonnage either by itself or in relation to speed, or on tonnage in relation to both speed and cargo. Payments so based are direct subsidies. Government encouragement of merchant shipping also takes indirect forms like granting construction loans to ship concerns at low interest, barring foreign shipping from coastwise traffic, exemptions from taxes and dues, free registry, and bounties to firms producing goods for export. Such bounties are frequently resorted to by backward c mme ce for their development France and Japan have made most use of direct subsidies, yet despite government aid the French merchant marine did not grow though Japan’s p ospered, but whether subsidies actually contributed to her shippirg development i; questioned. Great Britain in the days of undeveloped transatlantic shipping, 1840, helped the Cunard Line, then newly established, by an annual payment of $425,000, increased to $850,000, and aided similarly other British steamship lines that came into existence in the West India, South American, African, Australian and East Indies trades. The only payments made today by Great Britain are to shippirg irterests carrying the mails (for which service payment can hardly be deemed a subsidy) and a small sum paid to the Cunard line as a government obligation incurred when that company built the Mauretania and Lustiania to conform to Admiralty requirements. The United States pays for mail carrying On a more gererous scale than Great Britain does. The only subsidy paid by the United States was begun in 1845 to a ist American lines in face of subsidized British competition that came with the development of steam navigation. In form it was a postal subsidy that accorded special payments for carrying the mails. That the American lines depended upon it solely was shown when, in 1855, Congre allowed ve els carrying mails orly the sea pcstage plus the inland postage on mails carried. The outcome was that the American transatlantic companies stopped operations and sold their ve els. The present mail-contract law dates from 1891, After the World War the government sought a substantial subsidy from Congre to support the huge merchant marine the war brought in to existence (see Surprine), <A subsidy measure was introduced into the House of Representatives with this aim on November 20, 1922. Its prospects of approval by Congre were small from the start. Subsidy bills were of periodical occurrence and had always failed of Pa age, though sometimes by the narrowest of hostile major it ios. A strong opposition to such a method of government aid had always prevailed all over the country. In the early days the United States _was 2 maritime nation because its chief development lay along the Atlantic Seaboard, but with its growth inland after the Civil War (a period which marked the decay of American shipping), the country acquired far-flung domestic interests to the neglect of the foreign trade it once sought. President Harding conceived that there were special cireumstances favoring the granting of a subsidy in the post-war shipping situation, especially the fact that the government fleet was costing the country about $1,000,000 a week or $50,000,000 a year. The bill, he told Congre , would give direct aid to American shipping of not more than $30,000,000 a year if the merchant marine was so developed that it could carry half of the American deep-sea commerce, while at the present ocean-carrying capacity of the fleet, direct aid could not reach $20,000,000 a year. Hence at the maximum of outlay $20,000,000 annually could be saved on the existing operating lo es. The measure’s main provisions embraced authority to the Shipping Board to sell government-owned ships to American citizens on terms of payment covering fifteen years but not beyond; the creation of a construction loan fund of $125,000,000 from which the Board could lend money for fifteen years to purchasers and operators of ve els to enable them to construct and equip new shipping, the loans to be limited tc two thirds of the construction and equipment cost; authority to the Postmaster General to contract with such American -jines for the carrying of mails on terms to be agreed upon with the Shipping Board; the requirement that one-half of the total immigration to the United, States be transported on American ships; the establishment of the Merchant - Marine Fund, into which were to be paid all tonnage dues and taxes, 10% of the amount of all customs dues, and ‘all exce earnings paid by the owner of any ve el.’ The House with a scant 26 majority pa ed the bill in a mutilated form nine days after its presentation. As amended, the measure forbade the Shipping Board to loan a cent except with the consent of Congre —a restriction that virtually destroyed the object of the bill. It also denied subsidy privileges to _ve els owned by large corporations like the ‘Standard Oil Company, the United Fruit Company, and the U.S. Steel Corporation when engaged solely in transporting their own products. A | section giving a rebate from the income tax equal to 5% of the freight money paid to American ve els was also excluded. Another change was raising the interest of 2% to 444 as the minimum interest to be on loans from the construction loan fund. The Shipping Board’s powers were further curbed by forbidding it to exercise any control over rates and practices in the intercoastal trade or to sell any ships without advertising or competitive bids. It was also provided that the S.S. Leviathan should not be sold for le than the cost of reconditioning. The bill was usele to the Shipping Board in the form it pa ed the House. The Senate, where it had no chance at all, destroyed it by parliamentary tactics on February 28, 1923. borough witch; lived near Dropping Well, where her cavc is still shown; said to have prophesied Fire of London.