contract for this service was secured for a fifteenyear period by the North German Lloyd Company, of Bremen, which already had a wellestablished steam line to the United States. The North German Lloyd had come into existence in 1857, following the Hamburg-American Company, which had begun its work ten years earlier with sailing vessels, carrying freight and passengers from Hamburg to New York. These two German lines were developed to large proportions by the German immigrant traffic to the United States, which became enormous after 1850. Prudent management always characterized these enterprises, and in 1881, when Bismarck began to make his country great upon the ocean, they formed the best part of the German merchant marine.

The first of the East India subsidized steamships sailed from Bremerhaven on June 30, 1886, amid truly national rejoicing. A wave of enthusiasm for the sea, its trade, and its power now began to roll over the empire from the Baltic to the upper Rhine. This newly aroused maritime patriotism of the German people made itself felt

HERR ALBERT BALLIN.

(Director-General of the Hamburg-American Steamship

Company.)

There were long-established British and French lines that would have been glad enough to carry German mails and German freight and passengers to Hongkong and Hiogo, to Sydney and Alexandria, that would have cost the German government and people no additional subsidy. But government and people were moved by a profoundly patriotic impulse. They were determined to have their own ships to convey their own goods, and they were not merely willing but eager to make some sacrifice in order to achieve their purpose.

At first the patronage of the new imperial steamship service was insufficient to meet the expenses. Just as these fine steam lines to the far East would never have been started without the stimulus of a subsidy, so without the sup port of that subsidy they would soon have been abandoned. But slowly and surely there came the expansion of German traffic, which Bismarck's statesmanlike vision had foreseen. In 1888, the goods transported in the subsidized steamers amounted to 58,477 tons, of a value of 74,515,000 marks. In 1895, this commerce had risen to 166,575 tons, valued at 160,430,000 marks.* In 1887, Germany's exports to Asia

* Report of Prince Hohenlohe to the Reichstag.

and Oceanica were valued at 41,256,000 marks; in 1896, they had advanced to 176,246,000 marks, -a fourfold increase, which far more than repaid the cost of this splendid reënforcement of German commerce and the German mercantile marine.

STILL ANOTHER STEP.

In May, 1890, the imperial government took another step in direct encouragement of German trade and shipping by arranging with the . North German Lloyd Company for a monthly line of steamers to Zanzibar and South Africa for an annual subsidy of 900,000 marks ($214,000). In October, 1898, the successful contract for the Asian and Australian service was renewed for another fifteen-year period, with increased speed, more numerous voyages, and a larger class of steamers. At the same time the imperial subsidy was raised to 5,590,000 marks ($1,330,420), and the Hamburg- American Company was admitted to a portion of its benefits.

These imperial mail subsidies, though interesting and important, are only one of the agencies by which the German Government has aided the growth of its magnificent merchant fleet. Since 1879 all materials for shipbuilding have been imported free of duty,-a privilege which, as to ships for foreign trade, has been allowed since 1890 in the United States. The German Government railways have transported steel, iron, lumber, etc., to the shipyards at the mere cost of handling. This, of course, has had the practical effect of an indirect bounty upon German shipbuilding. In some German states such a

bounty seems to have been directly bestowed, for the United States consul at Hamburg declares, in a report to the State Department: *

In 1891, the government, upon the suggestion of the Chamber of Commerce, concluded to pay premiums to shipowners for promoting the interests of the merchant marine. Over 10,000,000 marks ($2,380,000) have been paid as premiums for new-built ships, and about the same amount has been paid to shipowners and steamship companies to aid their efforts in increasing the efficiency of mail carriage by steamships.

Nor is this all. As Mr. Frank H. Mason, our able consul-general at Berlin, states in a report to Washington: *

Not only has the German merchant marine been thus liberally and consistently supported by subsidies of money from the public treasury, but it has been encouraged, applauded, and honored by the entire influence of the imperial government, which in a country like this, where royal favor is so potent and eagerly sought for, is an important element of success. The Emperor is not only an enthusiastic yachtsman and sailor, but he is under all circumstances an ardent and powerful advocate of expansion and improvement of the German fleet and merchant marine. No capitalists or business men are more honored in Germany than those who have contributed to these results. When, in November last, Consul Meier, founder of the North German Lloyd Company, died, in his ninetieth year, the honors bestowed upon his memory were of princely splendor and solemnity. When Captain Schmidt brought home the lame and battered Bulgaria from her long, perilous battle with wintry seas, the Emperor's thanks and medals met him at the gang plank, and he and his men became heroes in the recognition of their government and countrymen.

It is not strange that with such a noble spirit Special Consular Reports. Vol. XVIII. 1900.

of devoted patriotism behind it the German steam fleet has increased fourfold in sixteen years, has grown more rapidly, in fact, than any other merchant fleet in Christendom. There is a hostile element, it is true, which has fought Germany's advance upon the sea, but it is a small faction and shrinking. As Consul-General Mason says, "There are not lacking conservatives -mainly Agrarians and socialist reactionaries— who have opposed this policy, as they oppose improvements in the canals and internal water routes of this country; but they do not control the policy of Germany, and in all probability never will."

NEW PORTS AND DOCKS.

German liberality to merchant shipping is manifest also in the expenditure, since 1888, of $125,000,000 on harbor improvements. No less than $75,000,000 of this went into the channel and docks of Hamburg alone, and the rest, instead of being wasted on creeks and goose-ponds in the remote interior, was used where every dollar of it counted directly for the enhancement of commerce, at Bremen and other genuine ocean ports. Germany has built dry docks for both the navy and the merchant service. sides the great, solid masonry structures at Wilhelmshaven and elsewhere, there were twentyseven large floating steel docks in 1900. German foresight has also provided schools for the training of young seamen, and physicians to guard their health.

Be

*In 1886, it was 566,617 tons; in 1902, 2,430,206. There are also 536,744 (net) tons of sailing vessels.

Photo by Pirie MacDonald, New York.

MR. GUSTAV H. SCHWAB, OF NEW YORK. (American agent of the North German Lloyd Steamship Company.)

HARBOR OF HAMBURG, SHOWING MAGNIFICENT MODERN SYSTEM OF DOCKS, WHARVES, TERMINAL WAREHOUSES, AND RAILWAY TRACKAGE, THE CHIEF COMMERCIAL FOCUS OF CONTINENTAL EUROPE.

The German policy of maritime protectionism, while a consistent part of the general imperial policy, has, therefore, not been restricted to subsidies for mail service or bounties for shipbuilding. Indeed, it is doubtless true that the Hamburg-American, the older of the great German steamship companies, has grown until recently with very little aid from direct subventions. This is only a part of the truth, however. The Hamburg-American, like the other German shipping lines, has profited by the aroused maritime ambition of the German people and the favor of the imperial government. It was not until the enforced building of the subsidized North German Lloyd liners in German yards had developed native skill and industry that the HamburgAmerican management saw its way clear to place in Germany a contract for its first thoroughly German ocean greyhound. After the Auguste

Victoria came the Fürst Bismarck.

The other great German shipping corporation, the North German Lloyd, also gives marked preference now to home builders. In the first half of the period between 1885 and 1898 the North German Lloyd spent 31,000,000 marks for shipbuilding in Germany and 36,000,000 marks in Britain. But in the second half of this period 63,000,000 marks were expended in Germany and only 6,000,000 marks in Britain. The privilege of German registry for foreign ships for general commerce has not yet been withdrawn, but the powerful influence of the imperial government is quietly exerted against the

MR. EMIL L. BOAS, OF NEW YORK. (American agent of the Hamburg-American Line.)

practice. The Emperor himself is well known to be a stout believer in German-built ships for the German flag, and although cargo vessels are still purchased abroad, Germany has become