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.]