steamers, nine krone per ton; employed in deep-sea trade,--sailing-ships,
nine krone; steamers, twelve krone per ton. Iron or steel ships rated
first class were entitled to these bounties. The mileage subsidy was
fixed at five hellers per ton, per hundred nautical miles run. It was
offered only for voyages "to places where no company in receipt of
State subsidies is obliged to maintain regular communications;" and
it was not to be given for "petty coasting trade."[DK]

This law was succeeded by an act of 1895 granting construction bounties,
with the intent of fostering domestic shipping and the use of domestic
material. The rates were proportioned according to the amount of foreign
or domestic material used, construction with domestic product receiving
the highest bounty. These rates were: for iron or steel hulls, thirty to
sixty krone per ton; for wooden ships, ten to twenty-five krone per ton;
for engines and auxiliary machinery, ten to fifteen krone per ton of
materials used; for boilers and pipes, six to ten krone per ton of
material. The total amount to be paid out yearly was limited to the
modest figure of two hundred thousand krone ($40,600).[DL]

The law of 1895 in reality was not effective, for ships of the Hungarian
merchant marine continued to be built in foreign parts--mainly in
British yards;[DK] and while the carrying capacity had considerably
increased, the tonnage had continued to decline.[DK] By 1904 the
situation had become so unsatisfactory that, as the American consul at
Budapest wrote, the passing of a new navigation-development law by
Hungary's Parliament had, it was believed, become a pressing
necessity.[DM]

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