The act of 1881 granted both construction and navigation premiums, and
was limited to ten years. The construction bounties, as was declared,
were given "as compensation for the increased cost which the customs
tariff imposed on shipbuilders" in consequence of the repeal of the law
granting free import of materials by construction; the navigation
bounties, "for the purpose of compensating the mercantile navy for the
service it renders the country in the recruitment of the military navy."
The construction bounties, on gross tonnage, were as follows: for wooden
ships of less than 200 tons, ten francs a ton; of more than 200 tons,
twenty francs; for composite ships, that is, ships with iron or steel
beams and wooden sides, forty francs a ton; for iron or steel ships,
sixty francs; for engines placed on steamers, and for boilers and other
auxiliary apparatus, twelve francs per 100 kilograms; for renewing
boilers, eight francs per 100 kilograms of new material used; for any
modification of a ship increasing its tonnage, the above rates on the
net increase of tonnage.[BO] The navigation bounties were confined to
ships engaged in the foreign trade, and were to be reduced annually
during the ten years' term of the law.[BP] They were thus fixed: for
French-built ships, one franc and fifty centimes a registered ton for
every thousand sea miles sailed the first year, the rate to diminish
each succeeding year of the term seven francs and fifty centimes on
wooden ships, and five centimes on iron and steel ships; for
foreign-built ships owned by Frenchmen admitted to registry, one-half
the above rates; for French-built steamers constructed according to
plans of the Navy Department, an increase of fifteen per cent above the
ordinary rate.[BQ]

The first effect of this law was to stimulate the organization of a
number of new steamship companies, and to occasion activity in various