France has been rightly termed the bounty-giving nation par excellence.[[BD]] She first adopted a policy of State protection of native shipping in the middle of the sixteenth century with the enactment (1560) of an exclusive Navigation Act, forbidding her subjects to freight foreign vessels in any port of the realm, and prohibiting foreign ships from carrying any kind of merchandise from French ports.[[BE]] This was followed up in the next century with the institution of the direct bounty system to foster French-built ships.[[BD]]
In the reign of Louis XIV, Colbert, Louis's celebrated finance minister, perfected (about 1661) an elaborate system of navigation laws, evidently copied from the rigorous English code. This was directed primarily against the commerce of Holland and England, with the ultimate object of upbuilding the home merchant marine and the laying of a broad basis for a national navy.[[BF]] These acts included decrees giving French ships the monopoly of trade to and from the colonies of France; imposing tonnage duties on foreign shipping; awarding direct premiums on French-built ships. England retaliated immediately. Holland remonstrated first, then made reprisals. For a time under Colbert's energetic administration of the finances and the marine, "prosperity grew apace. At the end of twelve years everything was flourishing."[[BG]] Then came the six years' war (1672-1678) with France and England combined against Holland, and at its end the French merchant marine lay sorely crippled.[[BG]]
Still the fundamental principles of the stringent navigation laws long remained. A decree in 1681, and subsequent ordinances, defined what should constitute a French vessel; and corporal punishment was ordained against a captain for a second offence in navigating a vessel of alien ownership under the French flag.[[BH]] By later decrees, no alien was permitted to command a French vessel. An ordinance of 1727 further restricted alien command by shutting out even French subjects who had married aliens.[[BH]] It was required that every French vessel should be manned by a crew two-thirds of whom were French subjects.[[BH]] The system of regulations restricting the trade of the French colonies to French ships, and to the home market held till well into the nineteenth century.
During the Revolution a decree (May, 1791) prohibited acquisition of all vessels of foreign build. In 1793 (Sept.) it was ordained that no foreign commodities, productions, or merchandise should be imported into France, or into any of her colonies or possessions, except directly in French ships, or in ships belonging to the inhabitants of the countries in which the articles imported were produced, or from the ordinary ports of sale or exportation. All officers and three-fourths of the crew were required to be natives of the country of which the foreign vessel bore the flag, under penalty of confiscation of vessel and cargo, and a fine enforcible under pain of imprisonment. A tonnage tax was levied on foreign ships alone.
Despite this elaborate code designed for its benefit the domestic mercantile marine almost entirely disappeared during the wars of the Republic and the Empire; and after the Restoration its revival was so slow that for some time foreign ships were absolutely necessary for the supply of the French market.[[BH]] Still the underlying principles of the code were retained by the Restoration Government, modified in a few particulars. The modifications included the removal of the prohibition on indirect commerce—- the carrying trade between France and other countries:—yet advantage even in this commerce was held for the French flag through "flag surtaxes," added to the ordinary customs duties levied upon the merchandise imported into France in foreign bottoms, and by the tonnage charges.[[BI]] A law of March, 1822, renewed the prohibition against the importation of foreign-built ships.[[BI]]
Early under Napoleon III movements toward the adoption of an economic policy similar to that then established in England were begun, and shortly a succession of radical changes in the maritime code were instituted.[[BJ]] In 1860 a commercial treaty with England was entered into. In 1861 freedom of access of foreign shipping to the French West Indies was permitted, subject to the payment of special duties varying according to the ports whence the goods were brought, or to which they were imported. Then at length, in 1866, numerous restrictions of the old code were swept away.[[BJ]] This law of 1866 (May) admitted duty-free all materials, raw or manufactured, including boilers and parts of engines necessary for the construction, rigging, and outfitting of iron or wooden ships; abolished a premium, or bounty, granted by a law of 1841 (May) on all steam engines manufactured in France intended for international navigation; admitted to registration foreign-built and fully equipped ships upon the payment of two francs a ton; abolished all tonnage duties on foreign ships, except such as had been or might be levied for the improvement of certain commercial harbors; abolished the flag surtaxes; opened colonial navigation to foreign ships. The monopoly of the coasting trade alone was retained for French ships.[[BK]]
Complaints against these new regulations were promptly raised by shipbuilders and ship-outfitters,[[BK]] and in 1870 a Parliamentary inquiry into their grievances was made. It appeared that shipbuilders, though enabled to import free such materials as they needed, were handicapped by numerous and extensive formalities; while the outfitters were embarrassed by special burdens which the law laid upon them, and which their British competitors did not have to bear.[[BL]] In 1872 laws were passed which reversed much of the act of 1866. A tax of from thirty to fifty francs a ton measurement was re-imposed on all foreign ships purchased for registration in France, together with a duty on marine engines; again a tonnage duty, of from fifty centimes to one franc, was imposed on ships of any flag coming from a foreign country or from the French colonies; and the provisions freeing materials for ship construction, and admitting foreign-built ships to French registration upon payment of the two-franc tax per ton, were repealed.[[BM]] In 1873 an extra-parliamentary commission took up the general question of the state of the commercial marine,[[BN]] and the outcome of this inquiry was the establishment of the system of direct bounties. This system was applied for the first time in the Merchant Marine Act passed in January, 1881.
The act of 1881 granted both construction and navigation premiums, and was limited to ten years. The construction bounties, as was declared, were given "as compensation for the increased cost which the customs tariff imposed on shipbuilders" in consequence of the repeal of the law granting free import of materials by construction; the navigation bounties, "for the purpose of compensating the mercantile navy for the service it renders the country in the recruitment of the military navy." The construction bounties, on gross tonnage, were as follows: for wooden ships of less than 200 tons, ten francs a ton; of more than 200 tons, twenty francs; for composite ships, that is, ships with iron or steel beams and wooden sides, forty francs a ton; for iron or steel ships, sixty francs; for engines placed on steamers, and for boilers and other auxiliary apparatus, twelve francs per 100 kilograms; for renewing boilers, eight francs per 100 kilograms of new material used; for any modification of a ship increasing its tonnage, the above rates on the net increase of tonnage.[[BO]] The navigation bounties were confined to ships engaged in the foreign trade, and were to be reduced annually during the ten years' term of the law.[[BP]] They were thus fixed: for French-built ships, one franc and fifty centimes a registered ton for every thousand sea miles sailed the first year, the rate to diminish each succeeding year of the term seven francs and fifty centimes on wooden ships, and five centimes on iron and steel ships; for foreign-built ships owned by Frenchmen admitted to registry, one-half the above rates; for French-built steamers constructed according to plans of the Navy Department, an increase of fifteen per cent above the ordinary rate.[[BQ]]
The first effect of this law was to stimulate the organization of a number of new steamship companies, and to occasion activity in various ship-yards, foreign (English) as well as home, in building steamships for their service.[[BR]] Most of the domestic-built iron and steam tonnage produced during the law's ten years' term was of steamers.[[BS]] The tonnage of steamships increased from 278,000 tons in 1880 to 500,000 tons in 1890. Of this increase more than three-fifths were represented by vessels bought in other countries.[[BT]] The results of the navigation bounties are shown in official statistics covering the years 1882-1890. During this period iron or steel French-built ships earning these bounties increased from 159,714 tons to 190,831 tons, gross tonnage; while wooden or composite tonnage decreased from 150,233 tons to 57,068 gross. Foreign-built iron or steel tonnage earning the bounties increased from 43,787 tons to 91,170 tons, gross; and wooden or composite tonnage increased from 1,220 tons to 9,799 tons, gross.[[BS]] In 1891 the law which had then reached its limit of ten years was extended for two years. Doubting its renewal shipowners had sometime before ceased to increase their fleets.[[BS]]
These results were variously pronounced unsatisfactory, and a revised or a new law was called for, with more and higher bounties. Owners of wooden sailing-ships were especially clamorous for larger benefits. They argued that sailing-ships being much slower than steamers should therefore receive higher mileage subsidies in order to compete on equal terms with steamships.[[BU]]