CHAPTER IV

GERMANY

Germany was a close follower of France in the adoption of the direct

ship bounty system. Only two months after the promulgation of the

initial French law of 1881, Bismarck brought the question before the

Reichstag, with an exhibit of this act. In an elaborate memorial (April

6, 1881) he reviewed the general subject of State bounties and subsidies

to shipping in various maritime countries, and closed with this pointed

declaration: "It is deserving of serious consideration whether, under

the circumstances as given, German shipping and German commerce can

hope" for further prosperous developments as against the competition of

other nations aided by public funds and assistance.[CJ]

At this time the German marine was represented by a substantial fleet of

merchant steamships, but all were foreign-built, mostly from British

ship-yards. The Government was paying only a postal subsidy of about

forty-seven thousand dollars--a sum in proportion to the weight of the

parcels forwarded--in the overseas trade to the participating German

steam lines. A first step had been taken indirectly in favor of domestic

shipbuilding six years earlier (1879), when Bismarck, in introducing the

general protective system, exempted this industry, and free entry was

permitted to German ship-yards of materials used in the construction and

equipment of merchant as well as of war-ships, which then were only on

the domestic stocks.[CK] Bismarck's proposal of 1881, to meet French

subsidies with German subsidies, was avowedly with the single object of

promoting with State aid a German mercantile marine.

The project was brought before the Reichstag early in 1884 and warmly

discussed. Earnest protests were raised against it by shipping merchants

of the chief German seaports;[CL] while earnest support came from other

merchants and varied interests. The initial proposal was for the

establishment of a subsidized mail service by German steamships. It

contemplated an annual subsidy of four million marks, with fifteen

years' contracts, for such service between Germany and Australia and

East Asia. The measure was defeated in the Reichstag that year. Brought

forward the next year (1885), and in a new form, it was finally enacted

in April and went into effect the following July.

This law increased the annual subsidy from four million marks as first

proposed to four million four hundred thousand marks, of which one

million seven hundred thousand was offered for the East Asian line, to

China and Japan; two million three hundred thousand for the Australian

line, and four hundred thousand for a branch line connecting Trieste

with the Australian line at Alexandria. The contracts in accordance with

it all went to the North German Lloyd Company, of Bremen. The convention

between the Government and this company required that the new vessels to

be furnished must be built in German yards and of German material. The

coal supply was, as far as practicable, to be of German product. The

chancellor was empowered to take over all the company's steamers for the

mobilization of the navy, at their full value, or on hire at proper

compensation. The sale or loan of a steamer to a foreign power could be

made only by permission of the chancellor. The number of voyages to be

made on each line yearly, and the rate of speed, were set down in

careful detail. Failure to observe the table of voyages, without

sufficient reason, subjected the company to heavy penalties. All persons

employed in connection with the mail service were, if practicable, to be

German subjects. All officers in the service of the empire, relief

crews, weapons, ammunition, equipments, or supplies for the imperial

navy, were to be carried at twenty per cent under the regular

tariff.[CM]

Subsequent laws made additions to the free list of raw and manufactured

shipbuilding material; and preferential rates on the State railroads

were arranged for the transportation of steel, iron, timber, from the

interior, where these are found at an average distance of some four

hundred miles from the coast, to the ship-yards.[CN] Speedily large and

superior steamships were designed and turned out from the enlarged

ship-yards, the first ocean flyer being the _Auguste Victoria_ for the

Hamburg-American Line. In 1890 a subsidy of ninety thousand marks

annually was granted for an East African line on a ten-years' contract.

Within less than six years the establishment of a fortnightly Asiatic

service was agitated; and in 1896 a bill granting a yearly subsidy of

one million four hundred thousand marks therefor, was brought before the

Reichstag. If this were forthcoming the North German Lloyd agreed,

besides furnishing the fortnightly service, to increase the speed of

their steamers, to send ships direct to Japan, and to meet all

requirements of the Admiralty with respect to ships and crews.[CO]

Now the advocates of further subsidies maintained that the policy

instituted with the law of 1885 had proved its effectiveness. The

indirect advantages from the subventions were claimed to be quite as

great as the direct. While before 1885 all large ships for German

companies had been ordered in England, now all large ships for the

German transatlantic lines were built in Germany.[CO] This condition,

the increasing activity in domestic shipbuilding, and the steady growth

of the empire's commercial marine, were presented as conclusive evidence

of the law's effect. Germany was now pressing into sharp rivalry with

England, and turning out larger and speedier steamships.[CP] The

increased subsidy for the China service was especially urged upon these

grounds: the importance of placing the German mail service in the East

on a par with the services of England and France, the benefits to

commerce, and the aid of the national defence.[CQ]

The measure met opposition at the session in which it was first

introduced; but at the next session (1898), after amendment, it became

law. By this act the subsidy was fixed at one million and a half marks a

year for the extension of the East Asiatic service to China direct, and

for making the whole service fortnightly; and the contract was extended

for another fifteen years. It was conditioned that if foreign competing

lines should increase the speed of their ships the North German Lloyd

must do likewise, and without additional subsidy, unless the foreign

companies should receive extra payments.[CR]

The total annual subventions for the Asiatic and Australian service had

now reached five million five hundred and ninety thousand marks

($1,330,420). After January, 1899, under a contract between the North

German Lloyd and the Hamburg-American Line then made, a part of this

subsidy went to the latter. In 1901 the subvention to the East African

line was increased to one million three hundred and fifty thousand

marks. Thus Germany's grand total of annual payments in postal

subventions had reached six million nine hundred and forty thousand

marks.

Besides these postal subventions and the free entry to materials used in

ship-construction and equipment, and the preferential railway rates on

long hauls of the heavy domestic materials, barely covering the cost of

handling and transportation,[CS] the Government bestows a special form

of indirect bounty upon the subsidized steamship lines in the shape of

largely reduced through freight rates. These include substantial

reductions on merchandise exported from inland Germany to East Africa

and the Levant. Thus the combined land and sea through rates are brought

considerably below those in force on goods sent to German ports for

direct importation.[CT]

Under these and other favoring conditions the German merchant marine has

advanced in total tonnage from an insignificant place in 1880 to the

third in rank among the maritime nations in 1911. Between 1885 and

1900, a period of only fifteen years, its growth was tenfold.[CU] In

1890 the gross tonnage stood at 928,911 tons: in 1900 it had reached a

total of 2,159,919 tons. Steamers and sailing-ships were nearly equal in

tonnage. German-built steamships had won the speed record in ocean

liners. Thereafter the output of steamships became much the larger, and

in 1906 the Government was taking measures to revive the sailing-ship

trade, because of its value as a training-school for seamen for the

navy.[CV] In 1910-11 the total tonnage was recorded at 4,333,186

tons.[CW]

The other influences contributing to this extraordinary growth are

variously stated according to the observer's point of view. The United

States consul at Hamburg sees them in the "rapid transformation of the

country from a non-producing nation into one of the foremost industrial

powers of Europe, a large available supply of excellent and cheap labor,

and the geographical situation of the empire."[CX] The historian of

Modern Germany sees them in German business methods:

"The astonishing success of the German shipbuilding industry is

due partly to its excellent management and organization; partly

to the application of science and experience to industry; * * *

partly to the harmonious co-ordination and co-operation of the

various economic factors which in more individualistic countries,

such as Great Britain, are not co-ordinated, and often serve

rather to obstruct and to retard progress by unnecessary friction

than to provide it by harmonious action."[CY]

FOOTNOTES:

[Footnote CJ: For this Memorial see U.S. Con. Rept., no. 112, Jan.,

1890, pp. 108-118.]

[Footnote CK: J. Ellis Barker, "Modern Germany," 3rd edition, 1909.]

[Footnote CL: Wells, p. 166.]

[Footnote CM: U.S. Con. Rept., no. 61, 1886, pp. 285-287.]

[Footnote CN: Barker, 3rd ed.]

[Footnote CO: Meeker.]

[Footnote CP: U.S. Con. Repts., 1889, no. 101, p. 544.]

[Footnote CQ: Meeker. Also German report on the operation of the law of

1885, in report of (U.S.) commissioner of navigation for 1898.]

[Footnote CR: Meeker. Also German report on the operating of the law of

1885, in report of commission of navigation for 1898.]

[Footnote CS: Barker, 3rd ed.]

[Footnote CT: Meeker.]

[Footnote CU: Barker, 3rd ed.]

[Footnote CV: U.S. Con. Rept, no. 13, July, 1906, pp. 87-89.]

[Footnote CW: Lloyd's Register, 1910-11.]

[Footnote CX: U.S. Consul General Robert P. Skinner, Hamburg, in Daily

Con. Repts., April 8, 1911, no. 82.]

[Footnote CY: Barker, Modern Germany, p. 490.]

Manual of Ship Subsidies An Historical Summary of the Systems of All Nations · 第 4 / 14 章