The report of this Parliamentary committee is significant in the
evidence it indirectly affords, confirming the declaration of
1853,[AT]--that the postal subsidies were not as assumed, payments
solely for services rendered, but in fact were concealed bounties.

In 1871-72, when a renewed effort was made to establish an American
line of American-built ships,[AU] the British subsidies were again
increased. Then, also, was instituted by the Admiralty the naval
subvention system--the payment of annual retainers to certain classes of
merchant steamers, the largest and swiftest, in readiness for quick
conversion into auxiliary naval ships in case of war, and to preclude
their becoming available for the service of any power inimical to
British interests.

At the expiration of the Cunard and Inman seven years' contracts the
postmaster-general applied the principle of payment according to weight
throughout for the carriage of the North American mails. But preference
was given to British ships, these receiving higher rates per pound than
the foreign. In 1887 an arrangement was entered into by which the Cunard
and Oceanic lines were to carry all mails except specially directed
letters, and the pay was reduced.[AV] This method of payment continued
till 1903.

Then another sharp change was made in the subsidy system to meet
another, and most threatening American move. In 1902 was formed by
certain American steamship men, through the assistance of J. Pierpont
Morgan, the "International Mercantile Marine Company," in popular
parlance, the "Morgan Steamship Merger," a "combine" of a large
proportion of the transatlantic steam lines.[AW] Upon this, in response
to a popular clamor, subsidy, and in a large dose, was openly granted to