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
sustain British supremacy in overseas steam-shipping. To keep the Cunard
Line out of the American merger, and hold it absolutely under British
control and British capitalization, and, furthermore, to aid the company
immediately to build ships capable of equalling if not surpassing the
highest type of ocean liners that had to that time been produced (the
highest type then being German-built steamers operating under the German
flag), the Cunard Company were resubsidized with a special fixed subsidy
of three-quarters of a million dollars a year, instead of the Admiralty
subvention of about seventy-five thousand dollars, and in addition to
their regular mail pay, the subsidy to run for a period of twenty years
after the completion of the second of two high-grade, high-speed ocean
"greyhounds" called for for the Atlantic trade.
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