New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1903-12-14
THE OCEAN RACE.
Fast Liners Nth Subsidies Behind
Them, and the Possibilities.
London. December 2


lain. who is upsetting British opinion on fiscal
policy, started the discussion by referring a.
Liverpool 10 the bounties and subsidies grantsd
% foreign shipping. The German press after a
critical study OF British blue books. produces
figures showing that the London governrnsnt
pays In subsidies two and a half times as mueb
to steamship lines as the Berlin governments ana
that German shipping interests are subjected 70
destructive competition. The Berlin correspond
ent OF The Times Gondon) takes the same aF-
ures and demonstrates that the British tonnaxa
Is five times as great the German tonnage
and that the subsidy in Great Britain averages
10 marks a ton. against 31L marks IN Ger
many. He begs the whole question at Issue
when he declines TO include IN hts calculations
the subsidies paid by the British Admiralty FIR
auxiliary cruisers. since his German antagonist
can hardly have mistaken the nature OF meas
ure Of national defence which is primarily con-
nected with the encouragement OF British ship
ping Whether British shipping Is more OF less
heavily subsidized than German shipping de-
pends. for purposes OF demonstration. upon
the method Of manipulating the figures. Neither
series OF calculations irnpairs the value OF Mr..
Chamberlain's conclusion that British SHIPPING
| is not sufficiently subsidized in proportion to
British trade.
The government contract with the Cunars
| Steamship Company illustrates more forcfblv
than tables of statistics the British policy %
encouraging and stimulating the developments OF
the commercial marine. AS Mr.. Chamberlain
himself conducted the negotiations with the 80
licitors Of the company. the contract represents
what the broadminded Imperialist considers sx-
pedient and necessary for the maintenance az
British prestige on the high seas. In accordance
with its stipuIations. the government is under
obligation TO pay annually for twenty years
for
from Liverpool and Queenstown to New-York
and an additional subsidy OF f15OOOO for general
purposes. 1t is also pledged to lend the money
required for the construction OF two new steam
ships. the amount being limited TO 100000.
This loan is to bear interest at "a per cent Is
TO be secured by a first mortgage upon the CON-
pany's entire fleet and is to be repaid IN twenty
annual instalments. In return the company
binds itself to remain purely British undertak-
ing. to place it's entire feet at the disposal OF
the government for purchase hire at reason
able rates in any emergency OF war. and to
build two vessels capable Of maintaining min
imum average ocean speed OF twenty-four to
twenty-five knots. The company receives els
600 annually and has the government treasury
behind it for financing the most favorable
terms the construction Of two new record break
ers. which will lower the prestige OF the German
flag. Whether this contract be considered q
measure of national defence or an immense sub
sidy for the encouragement OF British shipping,
the result is the same. The government Is be-
hind the Cunard Line and has greatly increased
the company's resources for competing with
other North Atlantic shipping lines and secur-
ing the fastest liners afioat.
When the terms OF the contract are analyzst.
it becomes apparent that the government not
only lends the money for the new ships. bur
virtually pays for them in annual subsidies The
twenty annual instruments Of f15O.OOO viii az
gregate f3O00O00. and as the cost OF constr1c.
ton is limited to f2,600OOO there ia a margin
OF 100000. The subsidies are nominaIly paid
however. on the assumption that vessels having
an average speed OF twenty-four or twenty-five
knots cannot be kept in commission without an
annual loss ranging from E11O.OOO to E149O0O.
The loss cannot be calculated half way between
these amounts for twenty-four and one-halc
knots. The Economist supposes, for both
the cost Of construction and the operating ex-
penses for coal. hremen and oilers increases
with cumulative effect for every quarter knot.
Nevertheless. the subsidies for twenty years are
considerably in excess Of the estimated losses in
annual traffic and interest payments on the cost
OF construction. These subsidies are independ-
ent Of the mail payments, which in the course
OF twenty years will amount to f1.360,0O0. As
for the stipUlations for purchase or hire OF the
fleet in time Of war no sacrifice OF the com
pany's interests is involved, for 1t viii receive
| full compensation for the use OF such vessels as
may be required for transports OF auxiliary
cruisers. The risks OF the new undertaking are
| considerable. for the construction OF these two
record breakers Is experimental and the subsidy
| payments are based upon the maintenance Of an
average sea speed OF twenty-tour and one-hat
knots. The responsibilities Of designing and
| constructing the vessels are shared by the Ad-
miralty and the company. and this fact VII n
huence the decision Of the arbitrator. II thsrs %
any failure in producing the requisite speed Ths
contract on the whole Is highly favorable to the
/ company. Without the subsidies and he facil-
/ tiles for borrowing and repaying the money
needed for the construction OF these costly SHIPS
| 1t would not be practicable for British ship
owners to challenge the ascendancy OF Germany
| IN the North Atlantic traffic
The recovery OF the Transatlantic record has
become a British interest. and patriotic English
men do not care what 1t costs so long as II .
/ done. The fact that Germany has built ana 3
| operating three four OF the fastest steamships
on the North Atlantic Is an asset OF great valuS
/ It promotes the interests OF German traas
| throughout the world. because Il increases
| the industrial prestige OF the Fatherlsne every
/ German commercial traveller talks aooas :
/ wherever he goes. and It helps him when 10
/ tries to sell his goods. This triumph OF msIin'
| engineering and commercial enterprise Is a mos
/ conspicuous advertisement of industrial Ger
| many, and il IS worth all that 1t has cost tne
| Berlin government British merchants as WsA
! as shipowners perceive the necessity for oeauns
i the fast German liners. and there have been ~
/ protests from any influential quarters asainss
the revival OF shipping subsidies. when -