Only two months after the promulgation of the
initial French law of 1881, Bismarck brought the question before the
Reichstag, with an exhibit of this act. In an elaborate memorial (April
6, 1881) he reviewed the general subject of State bounties and subsidies
to shipping in various maritime countries, and closed with this pointed
declaration: "It is deserving of serious consideration whether, under
the circumstances as given, German shipping and German commerce can
hope" for further prosperous developments as against the competition of
other nations aided by public funds and assistance.[CJ]

At this time the German marine was represented by a substantial fleet of
merchant steamships, but all were foreign-built, mostly from British
ship-yards. The Government was paying only a postal subsidy of about
forty-seven thousand dollars--a sum in proportion to the weight of the
parcels forwarded--in the overseas trade to the participating German
steam lines. A first step had been taken indirectly in favor of domestic
shipbuilding six years earlier (1879), when Bismarck, in introducing the
general protective system, exempted this industry, and free entry was
permitted to German ship-yards of materials used in the construction and
equipment of merchant as well as of war-ships, which then were only on
the domestic stocks.[CK] Bismarck's proposal of 1881, to meet French
subsidies with German subsidies, was avowedly with the single object of
promoting with State aid a German mercantile marine.

The project was brought before the Reichstag early in 1884 and warmly
discussed. Earnest protests were raised against it by shipping merchants
of the chief German seaports;[CL] while earnest support came from other
merchants and varied interests. The initial proposal was for the
establishment of a subsidized mail service by German steamships. It
contemplated an annual subsidy of four million marks, with fifteen
years' contracts, for such service between Germany and Australia and
East Asia. The measure was defeated in the Reichstag that year. Brought
forward the next year (1885), and in a new form, it was finally enacted
in April and went into effect the following July.

This law increased the annual subsidy from four million marks as first
proposed to four million four hundred thousand marks, of which one
million seven hundred thousand was offered for the East Asian line, to
China and Japan; two million three hundred thousand for the Australi