Shipping Subsidies
Collier's New Encyclopedia (1921)
financial aid to shipping by public authority. Great Britain appears to have led the way in this manner of promoting shipping service, Parliament in 1730 providing for a bounty of 20 shillings per ton on vessels of 20 tons and more employed in the white-herring fisheries. In 1839 the British Government also granted a subvention to the Cunard Company as a recompense for the carrying of postal matter, between Canada and Liverpool. The amount, beginning with £60,000, was gradually increased, finally being made to depend on the weight of mail matter carried. By methods such as these the British succeeded in building up their merchant fleet and in driving from the high seas the American clipper lines which previous to these subsidies had won much of the ocean-carrying trade. In addition subsidies have also been paid by the British Government for the option of buying or hiring certain speedy Cunard and White Star steamers in time of war. The policy of granting subsidies to ships has been followed by other European countries, though various methods have been employed. Germany paid an annual subsidy for the East Asian service, and other subsidies were paid the North German Lloyd for other services. Indirect subventions were paid also in the form of exemption from import duties. France also voted mail subsidies absidies which amounted in 1914 to $6,030,000. Italy paid subsidies in aid of construction and navigation amounting in 1912 to $2,000,000. The United States has followed no settled policy in the granting of shipping subsidies, though in 1845 it began to pay for the transportation of mails by ships. The abrogation of contracts for carrying of mails in 1858 by the United States Government brought about the failure of the Collins line which till that time had competed favorably with the Cunard. The abrogation of similar contracts later brought about the failure of the Pacific Mail Company. Under the Act of 1891 the United States instituted a mileage basis of payment for the carrying of mails, and the subsidies have been paid to foreign as well as to American lines. A general subsidy measure was introduced in Congress in ess in 1898, but failed to pass the House. A Senate committee in 1905 recommended a subsidy policy, and its permanent advantages have been gradually recognized in the plans put forward in 1919 for the resurrection of an American merchant marine.
What Has Changed in the Last Century
Collier's wrote in 1921 that the "permanent advantages" of subsidy were at last being recognised in American plans for a revived merchant marine, and the United States did act: the Merchant Marine Act of 1928 paid generous ocean mail contracts, whose abuses a Senate committee exposed in 1933-34, and the Merchant Marine Act of 1936 replaced them with open construction-differential and operating-differential subsidies administered by a new Maritime Commission. Those subsidies were themselves wound up late in the century — construction subsidies ended in the 1980s and the operating-differential programme was replaced by the Maritime Security Program in 1996, which pays a flat annual stipend to a fixed roster of about 60 US-flag ships kept available for military sealift. What Collier's could not foresee was the flag of convenience: registries such as Panama, Liberia and the Marshall Islands now carry a large share of world tonnage, so the old contest between national fleets that the article describes has largely dissolved. Subsidy fights have shifted to shipbuilding, where state support in Japan, South Korea and China has been the subject of OECD negotiations and WTO complaints rather than mail contracts.
Written for this edition, 2026.