Manual of Ship Subsidies: An Historical Summary of the Systems of All Nations

In Short

Edwin M. Bacon presents a compact, factual history of how the maritime powers of the world build, protect, and finance their merchant fleets. Writing in 1911, Bacon tracks the evolution of global shipping policies from strict seventeenth-century navigation laws to modern networks of direct bounties, mail subventions, and naval auxiliary payments. He examines the strategies of nations including Great Britain, France, Germany, Japan, and the United States, providing a dry, meticulous reference work meant to illuminate legislative debates over national merchant marines and state-sponsored commercial expansion.

The Story

The historical narrative moves chronologically and geographically through the legislation, treaties, and commercial rivalries that shaped global ocean transit. It opens with the foundation of modern maritime policy: the restrictive, mercantilist navigation acts of seventeenth-century England and France. Colbert in France and English lawmakers established strict national monopolies, forbidding foreign hulls from trading with domestic ports or distant colonies, and mandating that native crews man native ships. Over time, these rigid prohibitions proved cumbersome. By 1849, Great Britain repealed its restrictive code in favor of free trade, shifting its maritime strategy to fixed postal subsidies and naval subventions designed to fund fast ocean steamships available for wartime conversion.

The narrative then sweeps through continental Europe, detailing how other nations responded to British dominance. France emerged as the primary pioneer of direct state intervention, deploying a complex array of construction bounties, navigation payments, and shipping premiums based on gross tonnage and speed. Germany followed closely; under Bismarck’s direction, the Reichstag exempted shipbuilding materials from tariffs and subsidized mail lines to counter foreign fleets. Meanwhile, smaller maritime states such as Belgium, Denmark, Austria-Hungary, Italy, and Portugal adapted these models, granting lighterage exemptions, targeted mail contracts, or direct government loans. In the Far East, Japan rapidly modernized its fleet after the Japan-China War by adopting the French subsidy model, establishing powerful shipping monopolies like the Nippon Yusen Kaisha to secure dominance in Asian waters.

Finally, the narrative focuses on the prolonged political tug-of-war within the United States. Beginning with the initial transatlantic voyage of the auxiliary steamship Savannah and early mail grants in 1845, the American government periodically attempted to build up its merchant fleet to compete with British steam. Despite initial successes with lines serving Panama, California, and Europe, internal opposition repeatedly derailed long-term policy. Through the late nineteenth and early twentieth centuries—marked by the Lynch report of 1870, the Hanna-Frye bills, and President Theodore Roosevelt’s Merchant Marine Commission—American advocates urged the adoption of direct tonnage and speed bounties. Opponents fought these proposals as corporate giveaways, leaving the nation relying primarily on temporary postal contracts while its competitors operated heavily subsidized global fleets.

How It Unfolds

Mercantilism and the English codes European powers pass strict navigation laws prohibiting foreign hulls from entering native or colonial trade. These protectionist measures spark trade wars with Holland and establish the principle of state-controlled merchant fleets.

The rise of ocean steam navigation The American steamship Savannah demonstrates transatlantic steam transit, prompting Great Britain to establish regular ocean mail subsidies. British contracts with lines like Cunard and Inman secure global postal routes and foster a modern merchant navy.

France perfects the direct bounty France institutes an elaborate system of state support, offering direct cash rewards for vessel construction, navigation mileage, and crew training. Other European governments copy this framework to shore up failing domestic shipyards.

Bismarck drives German shipping expansion Germany introduces duty-free materials for shipbuilders and funds overseas mail routes. This strategic state backing transforms German shipping lines into major competitors against British transatlantic dominance.

Japan adopts Western maritime strategy Following nineteenth-century modernization, Japan funds state-backed shipping monopolies and enacts strict construction encouragement laws. Lavish treasury grants rapidly establish Japanese dominance in Far Eastern waters.

The United States debates merchant bounties American lawmakers argue continuously over how to revive a declining merchant fleet. Congressional committees and Presidential commissions present detailed bounty proposals, but sharp political opposition repeatedly blocks long-term subsidy bills.

The People

Jean-Baptiste Colbert The French finance minister under Louis XIV who perfects France’s rigorous navigation laws in 1661. Driven to build up the home merchant marine and outpace Dutch and English trade, he creates strict monopolies and tonnage duties, though subsequent wars leave the fleet badly damaged.

Otto von Bismarck The German Chancellor who initiates state backing for German shipping in 1881. Seeking to protect domestic trade against foreign fleets funded by public money, he exempts shipbuilding materials from tariffs and pushes direct mail subsidies through the Reichstag.

Iwasaki Yatarō The broad-visioned Japanese merchant who founds the pioneer Japanese steamship concern in 1877. After engaging in fierce commercial warfare with a rival state-supported line, he merges the companies in 1885 to form the dominant Nippon Yusen Kaisha.

Theodore Roosevelt The American President who vigorously champions state support for the U.S. merchant marine. Deeply concerned by the decline of American ocean shipping, he appoints a joint congressional commission in 1903 and urges lawmakers to subsidize fast steamship lines to South America and Asia.

In Its Own Voice

"The intent of this little book is to furnish in compact form the history of the development of the ship subsidies systems of the maritime nations of the world, and an outline of the present laws or regulations of those nations."

Bacon opens his manual by outlining his goal to present an impartial, fact-driven overview of global shipping policies.

"France has been rightly termed the bounty-giving nation par excellence."

The text highlights France’s leading role in pioneering direct financial grants to foster native shipbuilding and seamanship.

"Ship subsidies, open or concealed, are now granted by nearly every maritime nation."

In his concluding summary, the author emphasizes that despite varying definitions and methods, state intervention remains a universal feature of global maritime trade.

What It's Really About

The core argument centers on the inescapable link between state support and commercial sea power. Bacon demonstrates that no major power leaves its merchant fleet entirely to the mercy of free-market forces. Whether through open construction bounties, indirect postal subventions, tax exemptions, or preferential railway tariffs, governments consistently intervene to preserve their share of global carriage.

Underneath the legal details lies a fundamental national security question: how a country maintains an active auxiliary navy and a pipeline of trained mariners during peacetime. The book shows that while lawmakers debate the ethics of subsidizing private enterprise, international competition repeatedly forces nations to match their rivals' subsidies or forfeit trade dominance.

Why Read It Today

Economic historians, policy researchers, and readers interested in early twentieth-century trade will value this volume as a primary-source snapshot of global commercial rivalry on the eve of World War I. Bacon avoids dramatic flourishes, relying instead on clean, dry reporting that lets legal codes, tonnage statistics, and parliamentary reports carry the weight. The narrative feels like stepping into a well-organized reference library of 1911, offering a clear view of how international trade was organized when coal and steam ruled the seas.

The primary difficulty for modern readers lies in the dense financial data, long lists of maritime statutes, and constant conversions of obscure tonnage metrics. It is a work of pure policy exposition rather than a narrative history. What stays with you is the sheer scale of global protectionism; the text reveals that the modern debates over state-backed industries and international trade advantages are merely continuation of strategies perfected over two centuries ago.