To the Editor of the Sm,—According to the maxims of Free Trade, protected or subsidized industries are economical mistakes, costly to the country that supports them, When an industry requires more than the natural protection it enjoys over that of a foreign country, in the shape of cost of carriage, commissions and loss by exchange, it is clear that the energy and capital employed in that branch of production are misapplied and had better -bo utilized in some other direction where circumstances are more favourable to them. A subsidized line of steamers seems, however, to be very generally regarded as an exception to this Tule even by countries which profess to be erned by strictly free trading principles.
people, whose opinions are entitled to respect, think therefore that your strictures Upon the Chinese Government, forther violation of the principles advocate the most advanced school of Political economy in, their support of the China merchants' Steam Navigation Ca. are gland adopts th ligy of subsidizing land adopts the policy of sul ines of mail steamers, and even regular the subsidy, in tha case of the P. & O., by the state of that company's profit and Joss account. gives an enormous amount to the Messageries Maritimes, apparently with the object of fostering a mercantile steam marine; an object she cannot be held to have gained, because, outside of that great company and the Transatlantique, there are very fow merchant steamers owned by Frenchmen. Most other countries, notably Germany, Russia and Holland, subsidize lines of steamers.
The reasons that induce the Chinese Government to make use of its revenues to support " national lino of steamers, give evidence of a spirit of progress, of a desire to adopt the useful inventions of the West, which have given such a powerful impulse to the material, and, let us hope to the stretching moral, civilization of the Aryan races. You ceed. had often enough, if I remember rightly, remarked that the Chinese Mandarins restricted their appreciation of these inventions to engines of warfare. - But to place itself in a position to resist foreign encroachments or dictation is one of the first of national. duties on the part of a government, and the efforts of the Chinese to reassert its sway over revolted frontier tribes are worthy of respect, in the opinion of many, although you are earnest in condemnation of the war in the North-west. But all the more, you might have been ex-to hail with welcome the pacific effort to develope a commercial marine.
Six centuries ago, as we learn from Marco Polo and others, the Chinese were as bold navigators and skilful shipbuilders as any inthe world. The modern junks are very inferior specimens of shipbuilding to those described by Marco Polo. The see that they must rapidly become obsolete, and follow the example of the most enlightened amongst foreign governments in giving State support to aline of steamers. At first, this was done ina way with which one would suppose it was difficult for a foreigner to find fault, A portion of the tribute rice hitherto conveyed in junks was to be carried in the Chinese Company's steamers. This cost the Government nothing, as it was to be carried at the junk rate, six mace per shih of 140 catties delivered at Tungchow. Although this is a fairly remunerative rate for steamers, it is doubtful if it is highly Froitable and in certainly not exorbitant.
is difficult to seo why a contract between the Government and the newly formed company should have been based upon the assumption that a ruinous' competition would prevail. The Government might as well pay that amount to steamers as to junks, There was no reason why they Should have changed the course of the trade merely to ruin the existing native shipping interest, chinese Government evidently considers the native company to have been been toa very severe competition, fairly successful in its operations. It has or rather itself provoked a very severe competition, having increased the number of steamers trading on the coast in a much Tanger proportion than any increase of ithas brought. But now that an imt section of the opposition steamers been bought up, it probably thinks that the anticipated profits will accrue, since it is said that the Government has assumed all the outstanding liabilities of the company, including that to the S.8.N. ©o., and intends to take shares in it to the amount. This will of course be a great advantage in running an opposition, as the O.M.S.N. Ca. will not be burdened with the payment of heavy interest when business is unromuneratit it can then dispense with the payment of dividends, like its competitors. As this capital is to be provided out of the Custgms Revenues, derived from foreign trade, it will impose no additional burden on the people.
The policy of the company has hitherto es been marked by little originality. It has been confined to steamers only on lines already sufficiently supplied with carriers and Where freights were very moderate. They may have been successful in compelling the American company to been very ly regarded as an unde-sell out, but they have acquired what has table and nearly obsolete class of boats. They are not at all likely to extin-guise the competition of Englishshipowners, and the attempt to do so; if persevered in, ill infallibly bring them to ruin. It is probable that the Chinese Government has lip adequate conception of the vat resources of English steam shipping, which amounts 2 as puas and a ermapr tons.
succeed in running off any one company, they will find another and another, ing on to the crack of doom, to suc-Instead of continuing in a course of {dal opposition to powerful rivals, let em induce the Government to allow them to navigate the vast system of internal waterways in China, where, secured from foreign competition, they may gain handsome profits and largely stimulate the wealth of the country and the well-being of its inhabitants by facilitating the interchange of products. The terrible sufferings of the people by famine might have been greatly mitigated by this means.
Tam, Sir, Yours faithfully, Aupr Aurora Parte.
Shanghai, 23rd July.
Text read from the printed page and cleaned; old type leaves the occasional error.