FRANCE
France has been rightly termed the bounty-giving nation _par
excellence_.[BD] She first adopted a policy of State protection of
native shipping in the middle of the sixteenth century with the
enactment (1560) of an exclusive Navigation Act, forbidding her subjects
to freight foreign vessels in any port of the realm, and prohibiting
foreign ships from carrying any kind of merchandise from French
ports.[BE] This was followed up in the next century with the institution
of the direct bounty system to foster French-built ships.[BD]
In the reign of Louis XIV, Colbert, Louis's celebrated finance minister,
perfected (about 1661) an elaborate system of navigation laws, evidently
copied from the rigorous English code. This was directed primarily
against the commerce of Holland and England, with the ultimate object of
upbuilding the home merchant marine and the laying of a broad basis for
a national navy.[BF] These acts included decrees giving French ships the
monopoly of trade to and from the colonies of France; imposing tonnage
duties on foreign shipping; awarding direct premiums on French-built
ships. England retaliated immediately. Holland remonstrated first, then
made reprisals. For a time under Colbert's energetic administration of
the finances and the marine, "prosperity grew apace. At the end of
twelve years everything was flourishing."[BG] Then came the six years'
war (1672-1678) with France and England combined against Holland, and at
its end the French merchant marine lay sorely crippled.[BG]
Still the fundamental principles of the stringent navigation laws long
remained. A decree in 1681, and subsequent ordinances, defined what
should constitute a French vessel; and corporal punishment was ordained
against a captain for a second offence in navigating a vessel of alien
ownership under the French flag.[BH] By later decrees, no alien was
permitted to command a French vessel. An ordinance of 1727 further
restricted alien command by shutting out even French subjects who had
married aliens.[BH] It was required that every French vessel should be
manned by a crew two-thirds of whom were French subjects.[BH] The system
of regulations restricting the trade of the French colonies to French
ships, and to the home market held till well into the nineteenth
century.
During the Revolution a decree (May, 1791) prohibited acquisition of all
vessels of foreign build. In 1793 (Sept.) it was ordained that no
foreign commodities, productions, or merchandise should be imported into
France, or into any of her colonies or possessions, except directly in
French ships, or in ships belonging to the inhabitants of the countries
in which the articles imported were produced, or from the ordinary ports
of sale or exportation. All officers and three-fourths of the crew were
required to be natives of the country of which the foreign vessel bore
the flag, under penalty of confiscation of vessel and cargo, and a fine
enforcible under pain of imprisonment. A tonnage tax was levied on
foreign ships alone.
Despite this elaborate code designed for its benefit the domestic
mercantile marine almost entirely disappeared during the wars of the
Republic and the Empire; and after the Restoration its revival was so
slow that for some time foreign ships were absolutely necessary for the
supply of the French market.[BH] Still the underlying principles of the
code were retained by the Restoration Government, modified in a few
particulars. The modifications included the removal of the prohibition
on indirect commerce--- the carrying trade between France and other
countries:--yet advantage even in this commerce was held for the French
flag through "flag surtaxes," added to the ordinary customs duties
levied upon the merchandise imported into France in foreign bottoms,
and by the tonnage charges.[BI] A law of March, 1822, renewed the
prohibition against the importation of foreign-built ships.[BI]
Early under Napoleon III movements toward the adoption of an economic
policy similar to that then established in England were begun, and
shortly a succession of radical changes in the maritime code were
instituted.[BJ] In 1860 a commercial treaty with England was entered
into. In 1861 freedom of access of foreign shipping to the French West
Indies was permitted, subject to the payment of special duties varying
according to the ports whence the goods were brought, or to which they
were imported. Then at length, in 1866, numerous restrictions of the old
code were swept away.[BJ] This law of 1866 (May) admitted duty-free all
materials, raw or manufactured, including boilers and parts of engines
necessary for the construction, rigging, and outfitting of iron or
wooden ships; abolished a premium, or bounty, granted by a law of 1841
(May) on all steam engines manufactured in France intended for
international navigation; admitted to registration foreign-built and
fully equipped ships upon the payment of two francs a ton; abolished all
tonnage duties on foreign ships, except such as had been or might be
levied for the improvement of certain commercial harbors; abolished the
flag surtaxes; opened colonial navigation to foreign ships. The monopoly
of the coasting trade alone was retained for French ships.[BK]
Complaints against these new regulations were promptly raised by
shipbuilders and ship-outfitters,[BK] and in 1870 a Parliamentary
inquiry into their grievances was made. It appeared that shipbuilders,
though enabled to import free such materials as they needed, were
handicapped by numerous and extensive formalities; while the outfitters
were embarrassed by special burdens which the law laid upon them, and
which their British competitors did not have to bear.[BL] In 1872 laws
were passed which reversed much of the act of 1866. A tax of from
thirty to fifty francs a ton measurement was re-imposed on all foreign
ships purchased for registration in France, together with a duty on
marine engines; again a tonnage duty, of from fifty centimes to one
franc, was imposed on ships of any flag coming from a foreign country or
from the French colonies; and the provisions freeing materials for ship
construction, and admitting foreign-built ships to French registration
upon payment of the two-franc tax per ton, were repealed.[BM] In 1873 an
extra-parliamentary commission took up the general question of the state
of the commercial marine,[BN] and the outcome of this inquiry was the
establishment of the system of direct bounties. This system was applied
for the first time in the Merchant Marine Act passed in January, 1881.
The act of 1881 granted both construction and navigation premiums, and
was limited to ten years. The construction bounties, as was declared,
were given "as compensation for the increased cost which the customs
tariff imposed on shipbuilders" in consequence of the repeal of the law
granting free import of materials by construction; the navigation
bounties, "for the purpose of compensating the mercantile navy for the
service it renders the country in the recruitment of the military navy."
The construction bounties, on gross tonnage, were as follows: for wooden
ships of less than 200 tons, ten francs a ton; of more than 200 tons,
twenty francs; for composite ships, that is, ships with iron or steel
beams and wooden sides, forty francs a ton; for iron or steel ships,
sixty francs; for engines placed on steamers, and for boilers and other
auxiliary apparatus, twelve francs per 100 kilograms; for renewing
boilers, eight francs per 100 kilograms of new material used; for any
modification of a ship increasing its tonnage, the above rates on the
net increase of tonnage.[BO] The navigation bounties were confined to
ships engaged in the foreign trade, and were to be reduced annually
during the ten years' term of the law.[BP] They were thus fixed: for
French-built ships, one franc and fifty centimes a registered ton for
every thousand sea miles sailed the first year, the rate to diminish
each succeeding year of the term seven francs and fifty centimes on
wooden ships, and five centimes on iron and steel ships; for
foreign-built ships owned by Frenchmen admitted to registry, one-half
the above rates; for French-built steamers constructed according to
plans of the Navy Department, an increase of fifteen per cent above the
ordinary rate.[BQ]
The first effect of this law was to stimulate the organization of a
number of new steamship companies, and to occasion activity in various
ship-yards, foreign (English) as well as home, in building steamships
for their service.[BR] Most of the domestic-built iron and steam tonnage
produced during the law's ten years' term was of steamers.[BS] The
tonnage of steamships increased from 278,000 tons in 1880 to 500,000
tons in 1890. Of this increase more than three-fifths were represented
by vessels bought in other countries.[BT] The results of the navigation
bounties are shown in official statistics covering the years 1882-1890.
During this period iron or steel French-built ships earning these
bounties increased from 159,714 tons to 190,831 tons, gross tonnage;
while wooden or composite tonnage decreased from 150,233 tons to 57,068
gross. Foreign-built iron or steel tonnage earning the bounties
increased from 43,787 tons to 91,170 tons, gross; and wooden or
composite tonnage increased from 1,220 tons to 9,799 tons, gross.[BS] In
1891 the law which had then reached its limit of ten years was extended
for two years. Doubting its renewal shipowners had sometime before
ceased to increase their fleets.[BS]
These results were variously pronounced unsatisfactory, and a revised or
a new law was called for, with more and higher bounties. Owners of
wooden sailing-ships were especially clamorous for larger benefits. They
argued that sailing-ships being much slower than steamers should
therefore receive higher mileage subsidies in order to compete on equal
terms with steamships.[BU]
A new law was enacted in 1893 (January 30). This act cut off bounties to
foreign-built ships, and granted increased construction premiums. The
construction subsidies were again declared to be given as "compensation
for the charges imposed on shipbuilders by the customs tariff"; the
navigation bounties, "by way of compensation for the burden imposed on
the merchant marine as an instrument for recruiting the military
marine." The construction subsidies were not to be definitely earned
till the ships were registered as French; and by ships built in France
for foreign mercantile fleets, not till they had been delivered. The
navigation bounties were accorded to French-built ships, of more than 80
tons for sailing-ships, and 100 tons gross for steamers, engaged in
making long voyages and in international coasting; and were limited to
ten years. They were based on gross tonnage per thousand sailed miles.
To merchant steamships built in accordance with plans approved by the
Navy Department, the rate of fifteen per cent above the regular
navigation bounty provided in the law of 1881, was increased to
twenty-five per cent. All ships receiving the navigation bounty were
subject to impressment in case of war.[BV]
The effect of this law appears to have been a division of the interests
of shipowners and shipbuilders. The shipowners found the builders
constantly increasing their prices until a point was reached where they
were accused of absorbing both premiums for construction and navigation,
by calculating the amount of bounty which proposed construction would
demand, and adding that amount to their cost price.[BW] The increase of
the bounty on sailing-ships was made in the expectation that it would
check their falling off, which had been rapid since the development of
steamship building; merchant sailing-ships were regarded as the best
school for seamen, all of whom in French commerce, up to the age of
forty-five, are subject at any time to draft into the national navy. It
did this and more. There resulted the "strange phenomenon," as Professor
Viallatés puts it, "of a steady increase in the sailing-fleet, while the
number of steam-ships remained stationary."[BX]
Thus, like its predecessor, unsatisfactory, the law of 1893 was
succeeded by another act further enlarging the bounty system. This law
was promulgated in 1902 (April 7). It provided three classes of bounty:
construction and navigation as before, and "commission compensation" or
"shipping premiums." The construction bounty remained as in previous
law. The navigation bounty, now introduced as awarded "as a general
compensation for the charges imposed on the merchant navy, and for the
excessive cost of vessels built in France," was increased.[BY] It was
payable to all French-built sea-going ships, steam and sailing, of over
100 tons gross, and less than fifteen years old, and was limited to
twelve years. To stimulate speed development, only ships showing a trial
speed of at least twelve knots with half load were to receive the full
navigation bounty; to those making less than twelve knots the bounty was
diminished by five per cent; to those making less than eleven, by ten
per cent. The shipping bounty was declared to be granted "as
compensation for the charges imposed on the mercantile marine" by making
merchant vessels practically schools for seamen. It was a "chartered
allowance" made to foreign-built iron or steel steamers manned under the
French flag for long voyages or for international coastwise trade, of
more than 100 gross tons, belonging to French private persons or
joint-stock or other companies, the latter having on their boards a
majority of French citizens, and the chairman and managers being French.
This allowance was reckoned on the gross tonnage, and per day while the
steamer was in actual commission (three hundred days the maximum number
in any one year).[BX] The rate varied according to the tonnage. Up to
2000 tons gross, it was fixed at five centimes per ton; from 2000 to
3000 tons, at four centimes; 3000 to 4000, three centimes; above 4000,
two centimes; over 7000, the same grant as 7000. The creation of this
"chartered allowance," as Professor Viallatés explains, was to prevent
the navigation bounty from becoming to the same extent as under the
previous law merely another form of bounty upon shipbuilding. It could
so become, he points out, only to the extent of which it exceeded the
owner's bounty.[BZ]
Not all of the shipping and navigation bounties were to go to
shipowners. Five per cent was to be retained for sailors' insurance
"with a view to reducing the deductions imposed on them for the purpose
of that insurance"; and six per cent to be reserved for distribution for
the benefit of marines, as follows: "two-thirds to the provident fund,
with a view to diminishing the deductions on mariners' pay and to
increasing the funds for assisting the victims of shipwreck and other
accidents, or their families; one-third to the invalids' fund, with a
view to granting subventions to the chambers of commerce or public
institutions for the creation and support of sailors' homes in French
ports, intended to assist the nautical population, or of any other
institutions likely to be of use to them, especially schools for
seamen." The requirement in the old law of 1793 as to the composition of
the crews of French merchant ships was modified, reducing the proportion
of sailors who must be Frenchmen.
French-built ships were privileged to chose between the shipping and the
navigation bounties. To obtain the shipping bounty for the maximum of
three hundred days steamers must make during the year a minimum of
thirty-five thousand miles if engaged in the overseas trade, or
twenty-five thousand if in "_cabotage international_."[CA] Shipowners
agreeing to maintain on routes not served by the subsidized main
steamers a regular line, performing a fixed minimum of journeys per
year, with vessels of a certain age and tonnage, were permitted to
claim, in lieu of the regular bounties, a fixed subsidy during the term
of their agreement, equal to the average of the bounties to which the
vessels in commission would be entitled for the whole of the journeys
performed. The new tonnage to be admitted to the benefit of the law was
limited to three hundred thousand gross tons of steamers and one hundred
thousand gross tons of sailing-ships; of which new tonnage freight-built
ships could form two-fifths. The appropriation for the payment of the
bounties was also limited, to guard against a too heavy burden upon the
national treasury. This was fixed at two hundred million francs: one
hundred and fifty million for the shipping and navigation bounties and
fifty million for the construction bounties.[CB]
Unforeseen results of an unsatisfactory nature followed the application
of this law. Professor Viallatés effectively states them in the fewest
words:
"To be sure of profiting by the advantages of the law the
ship-owners hastened to order vessels and to place them on the
stocks. Their haste increased when it was seen that there existed
a considerable discrepancy between the allowed tonnage and the
money appropriated. The appropriation of one hundred and fifty
million francs, opened to assure the payment of the navigation
bounties and the compensation for outfit, was much too little.
The rush was such, as soon as this formidable mistake was
discovered, that, less than nine months after its promulgation,
from December 20, 1902, the useful effect of the law was
completely exhausted."!
Thereupon resort was had to another Extra-Parliamentary commission to
frame another system. The result was a law of 1906 (April), which
separated the shipbuilder from the shipowner. The provisions for the
construction bounty were redrawn with the object, as Professor Viallatés
explains,[CC] "not only to equalize the customs duties affecting the
materials employed, but also to give the builders a compensation
sufficient to enable them to concede to the French shipowners the same
prices as foreign builders." The rates were thus fixed on gross
measurement: for iron and steel steamships, one hundred and forty-five
francs per ton; for sailing-ships, ninety-five francs per ton: these
bounties to decrease annually to four francs and fifty centimes for
steamships and three francs ninety centimes for sailing-ships during the
first ten years of the law's application, thereafter to stand at one
hundred francs and sixty-five francs, respectively; for engines and
auxiliary apparatus, twenty-seven francs fifty centimes per hundred
kilograms. The navigation bounty to owners of French or foreign-built
ships under the French flag, was calculated per day of actual running:
for steamships, four centimes per ton gross up to 3000 tons; three
centimes more up to 6000; two more to 6000 and above; for sailing-ships,
three centimes per ton up to 500 tons, two more up to 1000, and one more
to 1000 and above. This bounty to continue for the first twelve years of
the law. The provisions for fostering speed development in steamships
excluded from compensation those making on trial, half laden, less than
nine knots, in place of ten in the previous law; reduced the rate to
fifteen per cent of the bounty for those showing more than nine and less
than ten knots; and increased this rate by ten per cent for those making
at least fourteen knots, by twenty-five per cent for fifteen knots, and
thirty per cent for sixteen knots. The extra bounty equal to twenty-five
per cent of the regular navigation bounty to steamships constructed on
plans approved by the Navy Department, and the provision making all
merchant ships subject to requisition by the Government in case of war,
were retained as in previous laws.[CD] This is the law at present in
force.
The total cost of the French bounty system in the twenty-four years from
its establishment with the law of 1881 to 1904, when the law of 1902 had
practically run out, was in round numbers upward of three hundred and
eighty-one million francs. Professor Viallatés shows that the new law of
1906 would absorb during the first seven years of its application,
upward of eighty-four million francs.[CE]
These construction and navigation bounties are exclusive of the
subventions to steamships for carrying the mails. The establishment of
the French postal ocean steamship subsidy system dates back to 1857,
when a contract was made with the Union Maritime Company for a service
to New York, Mexico, and the West Indies. The assertion is made by
Professor Meeker that the French postal subventions paid "ostensibly
for the furtherance of the mails," are "both greater in amount and more
influential upon shipbuilding, navigation, and commerce than are the
general premiums upon shipbuilding and navigation."[CF] Says Viallatés:
"The system is calculated to secure regular and rapid postal
communication with certain countries beyond seas, and at the same
time to constitute an auxiliary fleet capable of being utilized
by the navy in times of war. The existence of fixed lines with
constant service is also a means of favoring the expansion of the
national commerce. The State obtains, moreover, in exchange for
the subsidy, direct advantages; the free carriage of the mails
and the funds of the public treasury; transport of officials at a
reduced price, and of arms and stores destined for the service of
the State."
Meeker:
"The greater part of the concealed subventions undoubtedly goes
to the shipbuilders, for all mail contract steamers must be built
in French yards and of French materials. These first costs are
estimated to be from twenty-five to fifty per cent greater in
France than in England."[CG]
There is no competition in the letting of the French mail contracts.
They go to four steamship concerns. For many years more than one half of
the total steam tonnage of France has been owned by these four
subsidized lines: the _Compagnie Générale Transatlantique_, the
_Compagnie des Messagéries Maritimes_, the _Chargeurs Réunis_, and the
_Compagnie Fraissant_.[CG]
The great ship-yards have developed a capacity for building steamships
of the largest class. The tonnage since 1881, when it had fallen to
914,000 tons, had increased only to 1,052,193 tons in 1900. By 1910-11,
it had reached 1,882,280 tons.[CH] The total mail subsidies average, in
round numbers, five million dollars a year, while the construction and
navigation bounties amount to three and a half million dollars
additional.
Practically every French vessel floating the French flag and engaged in
foreign trade either receives or has received subsidies, or bounties,
from the Government.[CI]
FOOTNOTES:
[Footnote BD: Meeker.]
[Footnote BE: Lindsay, vol. III.]
[Footnote BF: Rear-Admiral Alfred T. Mahan, "The Influence of Sea Power
upon History," pp. 105-107.]
[Footnote BG: Mahan, p. 73.]
[Footnote BH: Lindsay, vol. III.]
[Footnote BI: Prof. Achille Viallatés, "How France Protects Her Merchant
Marine," in North American Review, vol. 184, 1907.]
[Footnote BJ: Lindsay, vol. III.]
[Footnote BK: Lindsay, vol. III, also Viallatés.]
[Footnote BL: Viallatés.]
[Footnote BM: Lindsay, vol. III, pp. 457-458.]
[Footnote BN: Viallatés.]
[Footnote BO: Meeker. Also Wells, pp. 163-164, _note_.]
[Footnote BP: Wells, pp. 163-164, _note._]
[Footnote BQ: Meeker. Also Wells.]
[Footnote BR: Wells, p. 164.]
[Footnote BS: Meeker.]
[Footnote BT: Viallatés.]
[Footnote BU: Meeker.]
[Footnote BV: For this law see Meeker.]
[Footnote BW: U.S. Consul Robert Skinner, Marseilles; Con. Repts., xol.
XVIII (1900), p. 36.]
[Footnote BX: Viallatés.]
[Footnote BY: Meeker.]
[Footnote BZ: North American Review, vol. CLXXXIV, 1907.]
[Footnote CA: Embracing voyages within the limits of the ports of the
Mediterranean, North Africa, and Europe below the Arctic
circle--Meeker.]
[Footnote CB: Meeker and Viallatés, summaries of this law.]
[Footnote CC: North American Review, vol. CLXXXIV, 1907.]
[Footnote CD: For this law see Senate Doc. no. 488, 59th Cong., 1st
sess.]
[Footnote CE: North American Review, vol. CLXXXIV, 1907.]
[Footnote CF: Meeker.]
[Footnote CG: Meeker.]
[Footnote CH: Lloyd's Register, 1910-11.]
[Footnote CI: Senate Rept., no. 10, 59th, Cong., 1st sess.]