unties were available for "any company
composed of Japanese subjects exclusively as members and shareholders
which shall establish a ship-yard conforming to the requirements of the
Minister of State for Communications, and shall build ships." The rates
were fixed as follows: for ships of over 1000 tons, twenty yen ($9.96)
per gross ton; of over 700 and under 1000 tons, twelve yen; for engines
built with ships, or in any other domestic dock-yard, with the consent
of the Minister of Communications, five yen per horsepower. Japanese
materials only were to be used, unless the Minister of Communications
should give permission to use foreign materials. The navigation bounties
were granted only for iron and steel ships owned exclusively by Japanese
subjects, and plying between Japan and foreign ports. The rates in this
class were: twenty-five sen (about 12-1/2 cents) per gross ton per
thousand miles run for ships of 1000 tons steaming at ten knots an hour;
ten per cent added for every additional 500 tons up to 6000 tons, and
twenty per cent for every additional knot up to seventeen. Foreign-built
ships less than five years old, owned by Japanese, were admitted to
these bounties. The postal routes established were fifteen in number,
calling for an annual expenditure of 4,964,404 yen (about $2,482,202)
when in full operation. The payments for postal service were to be
computed at the mileage rate given for navigation. Previous to this act
the postal subventions had amounted annually to nine hundred and
forty-five thousand yen in 1890 and 1891, and nine hundred and thirty
thousand yen in the subsequent years.[FD]

The effect of these laws was to stimulate overproduction. The _Nippon
Yusen Kaisha_ ordered eighteen large freight steamers aggregating 88,000
tons. Other companies doubled and trebled their fleets.[FD] One result
of the overproduction was the forcing down of freights. This, together
with the business depression of 1898-99, brought losses to the shipping
companies despite the large subsidies. The rapidly increasing amounts of
the subsidies, too, were giving the Government concern. From a total of
1,027,275 yen in 1896 the sum expended annually had grown by 1899 to
5,846,956 yen. The total paid between 1896 and 1899 had amounted to
13,133,440 yen, about $6,566,720.[FD]

Accordingly, in 1899 (March), a law was enacted modifying the system.
The navigation bounties on foreign-built ships were reduced by half,
while the sub