A new law was enacted in 1893 (January 30). This act cut off bounties to foreign-built ships, and granted increased construction premiums. The construction subsidies were again declared to be given as "compensation for the charges imposed on shipbuilders by the customs tariff"; the navigation bounties, "by way of compensation for the burden imposed on the merchant marine as an instrument for recruiting the military marine." The construction subsidies were not to be definitely earned till the ships were registered as French; and by ships built in France for foreign mercantile fleets, not till they had been delivered. The navigation bounties were accorded to French-built ships, of more than 80 tons for sailing-ships, and 100 tons gross for steamers, engaged in making long voyages and in international coasting; and were limited to ten years. They were based on gross tonnage per thousand sailed miles. To merchant steamships built in accordance with plans approved by the Navy Department, the rate of fifteen per cent above the regular navigation bounty provided in the law of 1881, was increased to twenty-five per cent. All ships receiving the navigation bounty were subject to impressment in case of war.[[BV]]
The effect of this law appears to have been a division of the interests of shipowners and shipbuilders. The shipowners found the builders constantly increasing their prices until a point was reached where they were accused of absorbing both premiums for construction and navigation, by calculating the amount of bounty which proposed construction would demand, and adding that amount to their cost price.[[BW]] The increase of the bounty on sailing-ships was made in the expectation that it would check their falling off, which had been rapid since the development of steamship building; merchant sailing-ships were regarded as the best school for seamen, all of whom in French commerce, up to the age of forty-five, are subject at any time to draft into the national navy. It did this and more. There resulted the "strange phenomenon," as Professor Viallatés puts it, "of a steady increase in the sailing-fleet, while the number of steam-ships remained stationary."[[BX]]
Thus, like its predecessor, unsatisfactory, the law of 1893 was succeeded by another act further enlarging the bounty system. This law was promulgated in 1902 (April 7). It provided three classes of bounty: construction and navigation as before, and "commission compensation" or "shipping premiums." The construction bounty remained as in previous law. The navigation bounty, now introduced as awarded "as a general compensation for the charges imposed on the merchant navy, and for the excessive cost of vessels built in France," was increased.[[BY]] It was payable to all French-built sea-going ships, steam and sailing, of over 100 tons gross, and less than fifteen years old, and was limited to twelve years. To stimulate speed development, only ships showing a trial speed of at least twelve knots with half load were to receive the full navigation bounty; to those making less than twelve knots the bounty was diminished by five per cent; to those making less than eleven, by ten per cent. The shipping bounty was declared to be granted "as compensation for the charges imposed on the mercantile marine" by making merchant vessels practically schools for seamen. It was a "chartered allowance" made to foreign-built iron or steel steamers manned under the French flag for long voyages or for international coastwise trade, of more than 100 gross tons, belonging to French private persons or joint-stock or other companies, the latter having on their boards a majority of French citizens, and the chairman and managers being French. This allowance was reckoned on the gross tonnage, and per day while the steamer was in actual commission (three hundred days the maximum number in any one year).[[BX]] The rate varied according to the tonnage. Up to 2000 tons gross, it was fixed at five centimes per ton; from 2000 to 3000 tons, at four centimes; 3000 to 4000, three centimes; above 4000, two centimes; over 7000, the same grant as 7000. The creation of this "chartered allowance," as Professor Viallatés explains, was to prevent the navigation bounty from becoming to the same extent as under the previous law merely another form of bounty upon shipbuilding. It could so become, he points out, only to the extent of which it exceeded the owner's bounty.[[BZ]]
Not all of the shipping and navigation bounties were to go to shipowners. Five per cent was to be retained for sailors' insurance "with a view to reducing the deductions imposed on them for the purpose of that insurance"; and six per cent to be reserved for distribution for the benefit of marines, as follows: "two-thirds to the provident fund, with a view to diminishing the deductions on mariners' pay and to increasing the funds for assisting the victims of shipwreck and other accidents, or their families; one-third to the invalids' fund, with a view to granting subventions to the chambers of commerce or public institutions for the creation and support of sailors' homes in French ports, intended to assist the nautical population, or of any other institutions likely to be of use to them, especially schools for seamen." The requirement in the old law of 1793 as to the composition of the crews of French merchant ships was modified, reducing the proportion of sailors who must be Frenchmen.
French-built ships were privileged to chose between the shipping and the navigation bounties. To obtain the shipping bounty for the maximum of three hundred days steamers must make during the year a minimum of thirty-five thousand miles if engaged in the overseas trade, or twenty-five thousand if in "cabotage international."[[CA]] Shipowners agreeing to maintain on routes not served by the subsidized main steamers a regular line, performing a fixed minimum of journeys per year, with vessels of a certain age and tonnage, were permitted to claim, in lieu of the regular bounties, a fixed subsidy during the term of their agreement, equal to the average of the bounties to which the vessels in commission would be entitled for the whole of the journeys performed. The new tonnage to be admitted to the benefit of the law was limited to three hundred thousand gross tons of steamers and one hundred thousand gross tons of sailing-ships; of which new tonnage freight-built ships could form two-fifths. The appropriation for the payment of the bounties was also limited, to guard against a too heavy burden upon the national treasury. This was fixed at two hundred million francs: one hundred and fifty million for the shipping and navigation bounties and fifty million for the construction bounties.[[CB]]
Unforeseen results of an unsatisfactory nature followed the application of this law. Professor Viallatés effectively states them in the fewest words:
"To be sure of profiting by the advantages of the law the ship-owners hastened to order vessels and to place them on the stocks. Their haste increased when it was seen that there existed a considerable discrepancy between the allowed tonnage and the money appropriated. The appropriation of one hundred and fifty million francs, opened to assure the payment of the navigation bounties and the compensation for outfit, was much too little. The rush was such, as soon as this formidable mistake was discovered, that, less than nine months after its promulgation, from December 20, 1902, the useful effect of the law was completely exhausted."!
Thereupon resort was had to another Extra-Parliamentary commission to frame another system. The result was a law of 1906 (April), which separated the shipbuilder from the shipowner. The provisions for the construction bounty were redrawn with the object, as Professor Viallatés explains,[[CC]] "not only to equalize the customs duties affecting the materials employed, but also to give the builders a compensation sufficient to enable them to concede to the French shipowners the same prices as foreign builders." The rates were thus fixed on gross measurement: for iron and steel steamships, one hundred and forty-five francs per ton; for sailing-ships, ninety-five francs per ton: these bounties to decrease annually to four francs and fifty centimes for steamships and three francs ninety centimes for sailing-ships during the first ten years of the law's application, thereafter to stand at one hundred francs and sixty-five francs, respectively; for engines and auxiliary apparatus, twenty-seven francs fifty centimes per hundred kilograms. The navigation bounty to owners of French or foreign-built ships under the French flag, was calculated per day of actual running: for steamships, four centimes per ton gross up to 3000 tons; three centimes more up to 6000; two more to 6000 and above; for sailing-ships, three centimes per ton up to 500 tons, two more up to 1000, and one more to 1000 and above. This bounty to continue for the first twelve years of the law. The provisions for fostering speed development in steamships excluded from compensation those making on trial, half laden, less than nine knots, in place of ten in the previous law; reduced the rate to fifteen per cent of the bounty for those showing more than nine and less than ten knots; and increased this rate by ten per cent for those making at least fourteen knots, by twenty-five per cent for fifteen knots, and thirty per cent for sixteen knots. The extra bounty equal to twenty-five per cent of the regular navigation bounty to steamships constructed on plans approved by the Navy Department, and the provision making all merchant ships subject to requisition by the Government in case of war, were retained as in previous laws.[[CD]] This is the law at present in force.
The total cost of the French bounty system in the twenty-four years from its establishment with the law of 1881 to 1904, when the law of 1902 had practically run out, was in round numbers upward of three hundred and eighty-one million francs. Professor Viallatés shows that the new law of 1906 would absorb during the first seven years of its application, upward of eighty-four million francs.[[CE]]
These construction and navigation bounties are exclusive of the subventions to steamships for carrying the mails. The establishment of the French postal ocean steamship subsidy system dates back to 1857, when a contract was made with the Union Maritime Company for a service to New York, Mexico, and the West Indies. The assertion is made by Professor Meeker that the French postal subventions paid "ostensibly for the furtherance of the mails," are "both greater in amount and more influential upon shipbuilding, navigation, and commerce than are the general premiums upon shipbuilding and navigation."[[CF]] Says Viallatés: