from the subventions were claimed to be quite as
great as the direct. While before 1885 all large ships for German
companies had been ordered in England, now all large ships for the
German transatlantic lines were built in Germany.[CO] This condition,
the increasing activity in domestic shipbuilding, and the steady growth
of the empire's commercial marine, were presented as conclusive evidence
of the law's effect. Germany was now pressing into sharp rivalry with
England, and turning out larger and speedier steamships.[CP] The
increased subsidy for the China service was especially urged upon these
grounds: the importance of placing the German mail service in the East
on a par with the services of England and France, the benefits to
commerce, and the aid of the national defence.[CQ]

The measure met opposition at the session in which it was first
introduced; but at the next session (1898), after amendment, it became
law. By this act the subsidy was fixed at one million and a half marks a
year for the extension of the East Asiatic service to China direct, and
for making the whole service fortnightly; and the contract was extended
for another fifteen years. It was conditioned that if foreign competing
lines should increase the speed of their ships the North German Lloyd
must do likewise, and without additional subsidy, unless the foreign
companies should receive extra payments.[CR]

The total annual subventions for the Asiatic and Australian service had
now reached five million five hundred and ninety thousand marks
($1,330,420). After January, 1899, under a contract between the North
German Lloyd and the Hamburg-American Line then made, a part of this
subsidy went to the latter. In 1901 the subvention to the East African
line was increased to one million three hundred and fifty thousand
marks. Thus Germany's grand total of annual payments in postal
subventions had reached six million nine hundred and forty thousand
marks.

Besides these postal subventions and the free entry to materials used in
ship-construction and equipment, and the preferential railway rates on
long hauls of the heavy domestic materials, barely covering the cost of
handling and transportation,[CS] the Government bestows a special form
of indirect bounty upon the subsidized steamship lines in the shape of
largely reduced through freight rates. These include substantial
reductions on merchandise exported from inland Germany to East Africa
and the Leva