AUSTRIA-HUNGARY
The Imperial Government of Austria-Hungary spurred by the action of
Germany, instituted a direct subsidy system, also modelled after that of
France, in 1893, when the Austrian merchant marine was languishing.[DD]
A postal subsidy had long been in operation, the subsidies being all
awarded to a single steamship company--the Austrian Lloyd, earlier the
Austro-Hungarian Lloyd. They were practically mileage and speed
bounties,[DE] increasing with the extension of service. Ten-years'
contracts were at first made with this company. The contracts, executed
in 1888, particularly guarded domestic interests. In the purchase of
materials it was required that preference be given to Austro-Hungarian
industries. The coal used must be bought from Austro-Hungarian subjects
in the proportion of two tons from Austria and one ton from Hungary,
provided that "the price is not greater than foreign coal, and that the
steam-producing power of the native coal is equal to at least
eighty-four per cent of that of foreign coal." In the building and
repairing of their ships, or parts of ships, and engines, the company
must also favor home interests. Ships, engines, or boilers could be
ordered abroad only with the consent of the foreign office when shown
that the work cannot be made in Austria within proper time, or that the
want can be supplied by a foreign country on more favorable terms.[DF]
By a law of July, 1891, the rates for mail-contract steamships were
fixed as follows: for fast lines, making above ten knots, a maximum rate
of seventy kreutzers per nautical mile; for slower lines, fifty
kreutzers a mile. The total amount of mileage bounty payable each year
was limited to two million nine hundred and ten thousand florins. But
in addition to this bounty the Government agreed to pay the Suez Canal
tolls. To encourage the Austrian Lloyd to build larger and swifter
vessels the Government further agreed to advance the company one million
and a half florins. This was to be furnished in three equal payments
yearly (1891, 1892, 1893), and was to be repaid in five equal payments
of three hundred thousand florins each, beginning in January, 1902. The
company's ships were to be exempted from consular fees, "the same as
vessels of the imperial navy"; and were to be at the disposal of the
naval and military departments in case of war. All the officials of the
company were to be Austrian subjects, "naval officers either active or
retired to be given the preference"; and there was to be an
administrative committee of eight members, the president appointed by
the Emperor and two other members by the ministry of commerce, the
intention of this provision being to give the Government control over
the company's affairs.[DG]
The general subsidy law of 1893 (November 28) was the outcome of the
deliberations of a special Parliamentary committee appointed that year;
and its declared object, as set forth in this committee's report, was
"to put a stop to the decline of our merchant fleet, to allow it to cope
with foreign competition, and to secure for the inhabitants of our coast
needed employment and profits in maritime pursuits."[DG] Three years
before (1890), with the same object in view, a preliminary step had been
taken in the exemption of all iron and steel steam and sailing ships
from trading and income taxes while engaged in ocean voyages.[DG]
The law provided two classes of subsidies--a trade bounty and a
navigation bounty. They were to go to all steamers and sailing-ships
engaged in the deepseas trade or long-coasting trade, and not receiving
mail subventions. At this time a large percentage of the Austrian steam
tonnage was receiving the postal subsidies, and most of this tonnage was
owned by the Austrian Lloyd Company.[DG] The trade bounty was for ships
making long voyages; the navigation bounty for those engaged in
coastwise voyaging. Ships entitled to the trade bounty were required to
be owned at least two-thirds by Austrian subjects, to be not over
fifteen years old, and registered A1 or A2. The rates were thus fixed:
for the first year after launching, iron or steel steamers, six florins
($2.44) per ton, iron or steel sailing-ships, four florins and fifty
kreutzers; wooden or composite (part iron) sailing-ships, three florins.
After the first year the rate was to be reduced five per cent annually
till the end of the fifteenth year. As an inducement to employ home work
and to utilize home materials, the bounty was to be increased by ten per
cent for iron or steel sailing-ships built in the Austrian ship-yards,
and by twenty-five per cent if at least one-half of the materials used
in the construction were of Austrian origin. If more than one year had
elapsed since the launching of a ship otherwise entitled to a bounty, a
deduction of fifteen per cent was to be made for each year that had
passed. The navigation bounty was fixed at five kreutzers per net ton of
capacity for every hundred nautical miles sailed. The exemption from the
production and income taxes, granted in 1890, was extended for a term of
five years from January 1, 1894. The law was to be in force for ten
years.
As the end of the term of this law was approaching ship-owners began
agitating for its renewal with an increase in the subsidy. Since its
enactment the production of steam tonnage had been accelerated, and the
decline of sail tonnage had been checked; but no marked change in the
merchant marine generally had been manifest.[DH] Of the bounties paid
the Austrian Lloyd had received a large share in behalf of their ships
which were not directly under contract for the mail service. The
remainder went to the various companies controlling the coast and river
trade. The ten to twenty-five per cent addition to the trade bounty for
ships built in domestic yards and from domestic materials, finally went
for the most part to a single large building concern at Trieste. While
most of the Austrian tonnage was yet of foreign build, mostly
constructed in British yards, the increase in the proportion of domestic
build was considerable after 1893. The greater part of the materials
used was Austrian product. Consequently allied industries increased with
this increased output of home ships.[DI]
At length in 1907 (February 23) a new law was enacted increasing the
navigation and construction bounties. For the navigation subsidies, to
go to shipowners according to the tonnage of the ships and the number of
miles run, allotments were thus made: for the first year, $852,600; for
1908, $893,200; 1909, $954,100; 1910, $1,015,000; 1911, $1,075,000; and
for the five years remaining of the term, of the law--which ends
December 31, 1916--$1,136,800 a year. The construction subsidies were
raised as follows: for ships launched after July 1, 1907: steamers built
of iron and steel $8.12 per gross ton, sailing-ships of iron and steel,
$2.84; for marine engines, boilers, pipes, and auxiliary apparatus,
$1.62 per 220.46 pounds. To entitle a ship to these bounties fifty per
cent of the materials used in its construction must be home product.[DJ]
This year (1907) also the annual postal subventions to the Austrian
Lloyd were increased $1,486,586, for a further period of fifteen years.
This contract called for an increase of speed to the Levant and the
Orient. The Suez Canal tolls were to be paid by the Government as
before.
* * * * *
The Kingdom of Hungary grants bounties to Hungarian ships, or ships
owned in greater part by Hungarian subjects, independently of the
Imperial Government. Her first general bounty law was also enacted in
1893 and was limited to ten years. The subsidies granted were of two
classes--premium on purchase, and a mileage bounty. The purchase subsidy
was based on net tonnage and was payable for a term of fifteen years
from the date of the ship's launching, reduced each succeeding year by
seven per cent; the mileage subsidy, for the same term, was in
proportion to the length of the voyages made "in the interest of
national commerce whether to or from Hungarian ports." The premiums on
purchase were thus fixed for the first year: for vessels employed in
long-distance coasting trade--sailing-ships, six krone (each 20 cents);
steamers, nine krone per ton; employed in deep-sea trade,--sailing-ships,
nine krone; steamers, twelve krone per ton. Iron or steel ships rated
first class were entitled to these bounties. The mileage subsidy was
fixed at five hellers per ton, per hundred nautical miles run. It was
offered only for voyages "to places where no company in receipt of
State subsidies is obliged to maintain regular communications;" and
it was not to be given for "petty coasting trade."[DK]
This law was succeeded by an act of 1895 granting construction bounties,
with the intent of fostering domestic shipping and the use of domestic
material. The rates were proportioned according to the amount of foreign
or domestic material used, construction with domestic product receiving
the highest bounty. These rates were: for iron or steel hulls, thirty to
sixty krone per ton; for wooden ships, ten to twenty-five krone per ton;
for engines and auxiliary machinery, ten to fifteen krone per ton of
materials used; for boilers and pipes, six to ten krone per ton of
material. The total amount to be paid out yearly was limited to the
modest figure of two hundred thousand krone ($40,600).[DL]
The law of 1895 in reality was not effective, for ships of the Hungarian
merchant marine continued to be built in foreign parts--mainly in
British yards;[DK] and while the carrying capacity had considerably
increased, the tonnage had continued to decline.[DK] By 1904 the
situation had become so unsatisfactory that, as the American consul at
Budapest wrote, the passing of a new navigation-development law by
Hungary's Parliament had, it was believed, become a pressing
necessity.[DM]
* * * * *
In 1909 the Austrian Government guaranteed a maximum sum of one million
crowns (approximating $200,000) annually to the Austro-American Shipping
Company for their service between Trieste and Brazil and Argentine
ports. Should the service tend successfully to promote home industries
and agriculture, this subsidy was to be increased, the amount of
increase to depend upon the amount of cargo carried in excess of a
certain minimum. The contract was to run for fifteen years from January
1, 1910. The service, beginning with sailings three times a month, was
to become weekly on January 1, 1911.[DN]
The total Austria-Hungary tonnage in 1910-11 was recorded at 779,029
tons.[DO]
FOOTNOTES:
[Footnote DD: Meeker.]
[Footnote DE: U.S. Con. Rept., Jan., 1890, no. 112, p. 95-96.]
[Footnote DF: U.S. Con. Repts., vol. XXXII, 1890, no. 112, pp. 23-24.]
[Footnote DG: Meeker.]
[Footnote DH: U.S. Con. Rept., no. 282, March, 1904, pp. 645-646.]
[Footnote DI: Meeker.]
[Footnote DJ: U.S. Con. Rept., no. 320, July, 1907, p. 180.]
[Footnote DK: Meeker.]
[Footnote DL: Meeker. Also Parl. papers, Com., 1909, no. 4, p. 8.]
[Footnote DM: U.S. Con. Rept., no. 283, April, 1904, p. 304.]
[Footnote DN: U.S. Con. Rept., no. 352, Jan., 1910, p. 45.]
[Footnote DO: Lloyd's Register, 1910-11.]