The Ohio Democrat. (Logan, O. [Ohio]) 1886-1906, 1902-04-17
SUBSIDY PRETENSIONS.
Bits From Our History of This
Kind of Legislation.
FAILURE OF GREAT EXPECTATIONS

Are Anything but Gratifying TO
Our Pride--Figures That Are Inter-
eutinE Just at This Time-same old
Arguments Used Today.
Mr.. Frye has consumed great deal
of energy in attempting to prove that
some countries pay subsidies. He de-
clared that these subsidies are paid
"for purposes of trade and for nothing
else" Then, rising to his full oratorical
height, he delivered this curious pro-
nunciamento: "Trade cannot precede
the mail! The mail must precede the
trade!
A more absurd misstatement was
never uttered, even in the halls of con-
gress.
In order to prove his wild assertion
Mr.. Frye would have to show that the
chief delight of the primitive savage
is to produce and consume literature.
But this utterance by the leader of the
subsidy movement is no more absurd
than the other arguments put forth in
defense of the Frye bill. We are told
that other nations pay $25O0O,0OO ev-
cry year for postal subsidies, and we
are solemnly admonished that we must
pay subsidies, too, if we wish to escape
commercial and industrial annihilation.
1t is implied that we do not pay sub
sides. AS a matter of fact the United
States government pays higher mail
subsidies for the service rendered than
any other country. Yet the subsidy
howlers say that our merchant marine
has declined because we haven't given
subsidies.
Shipping subsidies are not new
thing to this country. We have ex-
perimented with them several times
and always with results anything but
gratifying to our pride. In every case
the promoters of subsidy schemes in
congress have uttered the ancient and
threadbare fallacy about enormous ex-
pansion in trade to follow the granting
of subsidies, and they have always
ascribed the failure of their forecast TO
insufficient subsidy.
AS far back as 1850 congress voted a
subsidy to the Collins line. The sub
sidy failed to build up a great steam
merchant marine, and foreign COM
merce was not noticeably affected.
The venture ended in disastrous fail
ure, bringing ruin to all engaged in
the enterprise. In the period from
184S to 1858 congress expended more
than $4,000, 900 in subsidies similar to
the subsidy now proposed. During
that period our foreign trade went on
increasing exactly as if no subsidy had
been paid. When the subsidy policy
was discontinued, our foreign trade
continued to increase more rapidly
than before. All this goes to prove
that trade does not follow the mails
nor the mails follow the flag.
Frsm 1853 to 1866 the United States
government gave no subsidies for
ocean mail service. In the year 1866
the Garrison line from New York to
Rio Janeiro was subsidized to the
amount of $250.000 per annum for a
blmonthly service. Mr.. Alley in in
Producing the bill granting subsidy
to this life said, Establish this steam
communication with South America,
and you will not a great while longer
see England exporting $2S,000000
worth of merchandise and taking in re-
turn less than half the amount and the
United States exporting only $6,0O0,-
900, while the import of Brazilian
products is over $2O,0O0,000."
This line lasted nine years and cost
$1,500,000. When the subsidy was
withdrawn, the company suspended
operations. So ended the high eXpec-
tations proclaimed by Mr.. Alley.
The following table shows the con-
ditions of trade with Brazil before and
after the subsidy:
Imports. Exports
1885,. s..................... $16,S16,S03 $5,69l,659
1875. 75..................... 42,O27.S63 7.742.359
The increase of the import trade was
due not to the steamship line, but to
the removal of the duties on coffee and
rubber. In 1875 the imports of coffee
were $35,099274 and Of rubber $2,5l9-
43T. After the Garrison line was dis
continued our trade with Brazil went
on increasing more rapidly than before.
Meanwhile the commerce of England
with Brazil, without the protection of
government subsidy, grew much
more rapidly than our own.
In 1867 the government entered into
a contract with the Pacific Mail Steam
ship company for carrying the mails to
Japan and China via Hawaii. The serv-
ice was to be monthly, with a subsidy
of $500,000 per annum. In 1872 the
company offered to run another month
ly service for an additional $50O,000
year. With some difficulty bill au-
thorizing such a contract was passed
by congress in 1873. 1t was afterward
discovered that bribery had been used
to secure the passage of this measure.
1t was proved that the company had
spent more than $l.000000 to obtain
the subsidy. The new contract was alb
rogated by the government because of
the improper methods used in gaining
the necessary legislation and the subse-
quent failure of the company TO fulfill
the conditions of the contract In 1873
the service to the Sandwich Islands
was given up by the Pacific Mail
Steamship company. 1t had lasted for
six years and cost $425,000.
The state of trade with Hawaii be-
fore and after the experiment is given
below:
Exports. Imports
1871 oI'.''''.'s.s''"..'....''' SofO,49z SlOO.2o2
1873 ....................... 6N,19l l,275.O6l
The statistics show a decrease in ex-
ports of nearly 100000 and an almost
equal gain in imports. In the protec-
uonist view this is a loss of nearly