received out of this subsidy amounted to about $65,000. For this the mails have to be forwarded without further payment; and there are so many conditions relating to the high class of vessels, speed, itinerary, etc., that the subsidy so far has proved to be insufficient for the realization of a profit.

"For none of our other lines is a contribution paid by the State; and for the conveyance of mails on all these lines we receive nothing but the customary rates, which are certainly not larger in Germany than in your country. We do not even receive the subsidy which the British Government pays to the British steamship companies for fitting and keeping certain specially suitable steamships at the disposal of the Admiralty in case of mobilization. The large German steamship companies have hitherto agreed to render like services without demanding any payment in return."

Subsidies in Germany and England. The English continuing the charge that subsidies have helped German shipping wonderfully, Herr Ballin took occasion in a speech, June, 1902, to deprecate subsidies in general. He had in mind the London Times, of late seeming to favor the granting of subsidies to English shipping, regardless of service to the Government. He said: "A policy of bounties on the part of England capable of giving that country a really decided commercial advantage would simply have to be imitated by her leading competitors. The English shipping trade would then be forced into an unwonted and precarious channel without obtaining any advantage. These are the reasons why it is impossible to adopt too emphatic a tone in condemning any overrating of the subsidy system."

German Strength and British Weakness. The point of the matter is this: Germany, on becoming a nation, found itself without its proper share of shipping. The people believed in national unity. The establishment of national policy for national objects appealed to the patriotism of the German people in every part of the world, and they have endeavored to give their carrying to vessels of their own flag. Thus the German marine has grown by securing employment. Moreover, its owners have entered into combinations to secure freights, paying rebates to shippers, as the British do. Withal, German companies are strong in capital and give cheap insurance. The British underwriter cannot handicap German trade or transpor

tation. The prospect is that German shipping will soon attain capacity commensurate with German commerce wherever it may exist or can be created. Then competition will be harder. With England, the case is entirely different. She has upon the sea about 165 per cent. more tonnage than is sufficient for her own commerce. As she could not hold German transportation, so under proper conditions she could not hold American. As fast as the nations using her extra tonnage shall establish and increase marines of their own, just so fast will England lose her preeminence and her dominance. She cannot peaceably so regulate the trades of other nations as to hold their business firmly; nor can she afford to pay subsidies to retain work for her shipping. If peace continues, all the nations of the earth will one day possess their own navigation. In that day the shipping of England must find its carrying power leveled down to the wants of her own and her colonial commerce.

More Zeal than Knowledge. The argument confuted by Herr Ballin is one well calculated to impose upon the credulous. Another example may be given from a report of the Commissioner of Navigation:

"In one form or another European nations and Japan expend annually, according to the latest reports available, over $26,000,000 on their national merchant shipping, while, for the past fiscal year, the United States expended $998,211. Effort abroad has been followed by growth; lack of effort here has as surely been followed by decline."

Let us hold this up to the light: the foreign nations referred to are credited in Bureau Veritas statistics with an aggregate of 25,112,205 tons of shipping. It is this aggregate of foreign tonnage that our marine in foreign trade competes with for employment. Its subsidy is plainly, $26,000,000 ÷ 25,112,205 = $1.03 one dollar and three cents per ton. The report of the Commissioner of Navigation for the year referred to states our "foreign trade" tonnage the same that competes with that of Europe and Japan at 837,064 tons. Its subsidy is, manifestly, $998,211837,064 $1.16 one dollar and sixteen cents per ton, or 12.6 per cent. over the foreign largess. Moral: Beware of comparisons that argue adversely.

=

CHAPTER XXIII.

DOCTRINE OF BOUNTIES ADVERSELY SETTLED BY CONGRESS.

The Fishery Bill Debate of 1792. The tenor of the Constitution with respect to bounties had an emphatic rendering at an early day. In February, 1792, the Senate passed a bill for "An act for the encouragement of the Bank and other Cod Fisheries, and for the regulation and government of the fishermen employed therein." After debate, amendment, and passage in the House, the title was changed to: "An Act concerning certain fisheries of the United States, and for the regulation and government of the fishermen employed therein."

First Section of the Senate Bill. "That the bounty now allowed upon the exportation of dried fish of the fisheries of the United States, shall cease on all dried fish exported after the 10th day of June next; and in lieu thereof, and for the more immediate encouragement of the said fisheries, there shall be afterwards paid, on the last day of December annually, to the owner of every vessel, or his agent, by the Collector of the District where such vessel may belong, that shall be qualified agreeably to law, for carrying on the Bank and other Cod-fisheries, and that shall actually have been employed therein at sea, for the term of four months at least, of the fishing season next preceding (which season is accounted to be from the last day of February to the last day of November in every year), for each and every ton of such vessel's burden, according to her admeasurement, as licensed or enrolled; if of 20 tons and not exceeding 30 tons, $1.50, of which bounty three-eighths parts shall accrue and belong to the owner of such fishing vessel, and the other five-eighths thereof shall be divided by him, his agent or lawful representative to and among the several fishermen who shall have been employed in such vessel, during the season aforesaid, or a part thereof, as the case may be, in such proportion as the fish they shall have respectively taken may bear to the whole quantity of fish taken on board such vessel during such

season. Provided, that the bounty, to be allowed or paid on any vessel for one season, shall not exceed one hundred and seventy dollars."

The Debate in Committee. Mr. Giles, of Va., having doubt about the principle of the bill, moved to strike out the first section; observing that "he could not positively assert, whether the reasons which determined him against the principle of the bill were well founded or not; that in matters where a local preference is given, it is necessary to accommodate; and he would be happy if his objections could be removed.

6

"The present section of the bill appears to contain a direct bounty on occupations, and if that be its object, it is the first attempt as yet made by this Government to exercise such authority; and its constitutionality struck him in a doubtful point of view; for in no part of the Constitution could he, in express terms, find a power given to Congress to grant bounties on occupations: the power is neither directly granted, nor (by any reasonable construction that he could give) annexed to any other power specified in the Constitution. It might perhaps be brought in under a mode of construction already adopted by the House, viz. that of ways and ends' by which any power whatever might be equally implied; but he wished ever to see some connection between a specified power and the means adopted for carrying it into execution. There is a great difference between giving encouragement, and granting a direct bounty. Congress have a right to regulate commerce; and any advantage thereby resulting to a particular occupation connected with commerce comes within that authority; but when a bounty is proposed to a particular employment or occupation, this is stepping beyond the circle of commerce; and such a measure will affect the whole manufacturing and agricultural system. In all cases, the revenue, to be employed in this bounty, is drawn from all the sources of revenue in the United States, and confined to a particular object."

Individual Rights forbid Bounties. Mr. Giles was averse to bounties in almost every shape, "as derogations from the common right;" and he thought there would be no great difficulty in proving that a Government is both unjust and oppres

sive in establishing exclusive rights, monopolies, etc., without some very substantial merit in the persons to whom they are granted; although even in that case, the propriety of such grants is still questionable. "Under a just and equal government every individual is entitled to protection in the enjoyment of the whole product of his labor, except such portion of it as is necessary to enable Government to protect the rest; this is given only in consideration of the protection offered. In every bounty, exclusive right, or monopoly, Government violates the stipulation on her part; for by such a regulation, the product of one man's labor is transferred to the use and enjoyment of another. The exercise of such a right on the part of Government can be justified on no other principle than that the whole product of the labor of every individual is the real property of Government, and may be distributed among the several parts of the community by governmental discretion; such a supposition would directly involve the idea that every individual in the community is merely a slave and bondman to Government, who, although he may labor, is not to expect protection in the product of his labor. An authority given to any government to exercise such a principle would lead to a complete system of tyranny."

66

A Drawback must not cloak a Bounty. Although the apparent intention of the bill is only to convert the present existing drawbacks into a bounty; yet the drawbacks being allowed only to the actual exportation of the fish, and the bounty being granted on the tonnage of the fishing vessels, there can be no comparative value between the drawback and the bounty; they have no necessary relation to each other, and the latter may exceed the former, or the former exceed the latter. He had made a calculation, and upon the most favorable principles, grounded upon the reports of the Secretary of the Treasury and the Secretary of State." He then offered a calculation tending to show that the proposed bounty on the tonnage of the fishing vessels would considerably exceed the amount of the present drawbacks. From a comparison between the bounty and the number of sailors employed in the fisheries, he showed what an expense each man would be to the United