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A survey of maritime relations between Belgium and the united states of America (1830-1939) (I)


BY R. BAETENS


Until now there have been no specific publications drawing attention to this complex theme. In this contribution I would like to underline a few general points and so awaken interest in making a deeper analysis of the subject.


The conditions


1. THE GENERAL EVOLUTION OF BOTH NATIONAL MERCHANT FLEETS

When Belgium became independent in 1830 the North Netherlands shipowners left Antwerp, taking with them most of the shipping including the largest liners. In 1829 the fleet numbered 182 ships with a total tonnage of 26,962 Moorsom tons. In 1840 the tonnage was still 22.4% lower than that in 1829 On the eve of the revolution the fleet in Antwerp was equivalent to 17,063 Moorsom tons and by 1835 the tonnage had dropped to 7,088. The business world of Antwerp was not interested in expanding its own fleet. They feared competition and thought that insufficient return freight would not make it worth their while to take such a risk. The government then took it upon itself to take the necessary steps and set about things in two ways.

First of all they granted a modest sum of money to the ship-building industry (decree of 7th January 1837). On 21 st July 1844 there followed an act of differential rights. This meant that ships sailing under the Belgian flag were charged a lower import duty. This was badly received in Antwerp shipping circles, since they feared it would be detrimental to port traffic. Those in favour of absolutely free trade obtained the repeal of the act on 19th of June 1856  The effect must have been fairly favourable all the same, as the national fleet increased its tonnage by 56% between 1840 and 1855 ; alter the act was repealed, however, the tonnage dropped once more. In 1870 it was still lower, although the average tonnage rose steadily. In this connection it is remarkable to note that tonnage nearly doubled between 1870 and 1875 owing to the sudden increase in steam shipping (see Appendix I). Meanwhile, Belgian ships paid 10% less on import duty (the act of 1822).

The second course of action lay in subsidising a shipping fine. With the act of 29th June 1840 the government provided a yearly subsidy to a maximum of 400,000 BF for a fourteen year period. Since the private sector did not avail itself of this golden opportunity, the government assumed control by buying "The British Queen", a packet-boat of 2,250 tons, to start a line to New York. Because of heavy fosses this came to an end alter only three voyages (see further). From that time onwards only sailing vessels were subsidised. Private initiative in the fifties also failed despite the assistance of the "Société Générale". In relation to the Belgian merchant fleet we would like to mention that the 1844 act was to establish an Ostend-Dover line. This was held jointly and run by a British commercial undertaking till the year 1863. More important still was the conclusion of a contract in 1873 with the "International Navigation Company" of Philadelphia, which with American capital brought the "Red Star Line" into being, though under the Belgian flag. Finally, the founding of the Congo Free State provided an incentive to open up a regular fine which gave a lead to the creation of the "Compagnie Belge Maritime du Congo", which in its turn led to the formation of the greatest Belgian shipping company, the C.M.B. in 1930. In short it may be concluded that no strong fleet was built up for two reasons: on the one hand, the lack of experience and interest of Belgian financiers in maritime affairs and, on the other, too few convincing and co-ordinated policier on the part of the Belgian government. The propagation of the maritime ides in Belgium had to wait till 1899 with the founding of the "Ligue Maritime Belge" followed by the Higher Maritime Council ("Hogere Zeevaartraad") in 1911, an advisory body meant to inform the government.

On the eve of the First World War, we owned a 0.53% share of the international tonnage, a rather poor record in comparison with our commercial volume. For example, the merchant fleet of the Netherlands comprised 427 ships in 1913 with a capacity of 1.2 million BRT (2.7% of the international fleet) , whereas Belgium did not have more than 260,000 BRT. By the beginning of the First World War, the majority of Belgian shipowners were too new and inexperienced to hold their own. At the end of the war, the national fleet had dropped to a mere 4.5% of its pre-war record . With the outbreak of hostilities, the Belgian shipowners went into exile in Great Britain. According to the convention of 11 th June 1915 between the Belgian shipowners association it was agreed that 20% of the available tonnage should be put at the disposal of the state. Compensaion was to be settled according to British standards, the so-called "Blue Book Rates". These tariffs being based on pre-war costs, during the war years the shipowners made heavy financial losses. This heavily undermined their competition potential with neutral countries such as the Netherlands. When peace returned, it was found that countries abroad had been able to enlarge their fleets considerably with newer and larger vessels. According to the shipowners association, the insurance paid out for shipping losses was too low to replace pre-war tonnage. Moreover, contrary to regulations abroad, the bonus for special war damage insurance was not paid out to shipowners, but ended up in the coffers of the Belgian treasury. Alter the war, when Belgian shipowners were forced to enlarge their fleet, they were faced with steep-rising prices in the shipbuilding industry, a state of affairs that continued till 1920. The optimum of some of the shipowners bore this out. The demand for raw materials and the feverish climate of economic recovery provided extra impetus to the maritime traffic of 1919-1920. But later excessive demand for tonnage on the world market brought about a collapse in freight prices. As early as September 1922, the Belgian Ambassador in Yugoslavia had written to minister Jaspar that the international merchant fleet was already in a critical situation.

In time, owing to the financial strain, the shipowners found themselves in the impossible position of running their ships as a paying concern. Prosperity returned in 1927 and from then on new orders came in. However, these ships were launched when the first signs of the depression began to be felt (see sudden growth of the fleet in 1930, Appendix I).

An index comparison between the evolution of the world tonnage and that of the Belgian fleet (in BRT) demonstrates that the latter underwent a proportionally higher expansion between 1920 and 1924 than the international fleet (Table 1). After 1925 the national fleet began to dwindle and by 1929 reached an even lower level than in 1920.

Developments in the thirties can be concisely summed up as follows. The Belgian merchant fleet, which had reached 362,701 net tons by 1930, decreased steadily till 1938 but had a short-lived recovery in 1939. This unfavourable turn of events was precipitated by protectionism, which a small country such as Belgium, mainly relying on foreign trade, found difficult to withstand.

Another aspect was the dismantling of the ships. On 1st January 1932, the total net tonnage of our fleet consisted of 358,612 tons. The average dismantled tonnage of 1931-32 was 97,000 tons or 43% (see Appendix IV), liquidation of the dismantled ships being the main reason for the decrease in unused tonnage. In the course of 1934, 22% of the fleet remained laid up. Another case in point concerns the modernisation of the fleet. From 1929 onwards Belgium launched motorships with a notably higher average tonnage than steamships. The proportion in the total tonnage rose considerably, especially from 1937 onwards till the eve of the Second World War, when it reached 53% (Appendix I).

Let us now examine the evolution of the American merchant fleet (Table 2). After the consolidation of independence of the USA (1789-1829), legislation was brought in and tariffs set on some fifty commodities as a protectionist policy and also to protect their own fleet. The result can be deduced from the changing proportion of foreign shipping arriving in American ports. This amount dropped from 46% in 1789 to 8% between 1806 and 1808. From 1830 to 1863 onwards, it varied between 30 and 39%. Thereafter it rose again by leaps and bound to around 80% in 1883, and the situation remained stable till the First World War (around 78%). The decline after 1830 and still more so after 1870 is somewhat obscured by the growth of the total gross tonnage.

This protectionist attitude was gradually dropped after 1830, following the signing of trade agreements. The "Tariff Act" of 30th July 1846 ended ail tariff discrimination, though tariff reciprocity remained, however. If, according to international statistics, the American fleet had a good record, this was entirely due to their inland waterways and great rivers as well as coastal waters. The fleet, including the fishing fleet, amounted to 23,333 ships and 5,165,000 BRT. Only in the year 1855 and the period 1860 to 1861 was this amount higher. Their share of the international transport trade stood at no more than 15.8%. The cause for this stagnation is better illustrated by the fact that in 1800 the gross registered tonnage for international trade for the original thirteen states came to 670,000 tons and in 1900 amounted to only 483,000 tons. Furthermore, it was not till 1898 that the tonnage of steam shipping would equal that of sailing ships. Because of the regularity of the service and low freight charges on the Atlantic route, sailing ships were able to keep up with competition. Accordingly, the decline of the American fleet was not immediately noticeable on this service. The growth in total tonnage was due to an increase in the coastal service and traffic on the Great Lakes (1/3). In 1908 only seven transatlantic liners sailed under the American flag. It is interesting to note that, owing to the colonisation of the Far West, Alaska and the Hawaian Islands between 1893 and 1903, the tonnage doubled proportionally on the Pacific run. According to a report from the Belgian Embassy, there were many reasons for the poor representation of the American fleet on the Atlantic route. Besides the already mentioned abolition of protectionism, there was the Civil War. Within this period, 239 ships were impounded and 734,652 gross tonnage sold to other countries. Finally, the changeover from wood to iron and steel put the American shipping industry in great difficulties. As a protected industry it lacked the incentive of competition. For this reason the cost price of materials and salaries were higher in the USA than anywhere else. Sailing under a foreign flag was a paying proposition. The inland expansion consumed most of the resources. The volume on inland traffic was twenty times that derived from foreign traffic.

At the end of the last century the government tried to solve the problem. There were two opposite points of view. The Democrats wanted to abolish the laws preventing ships built abroad from registering under the national flag. The Republi­cans on the other hand wanted to develop their own shipping industry by means of subsidies. The latter option was chosen. Nevertheless at the outbreak of the First World War there was a considerable shortage of shipping tonnage. With the war effort, the American fleet was greatly increased, so that by 1921 it equalled four times that of 1914. As a result the USA became the first maritime nation of the world. The decrease in American tonnage as a result of the slump in freight tariffs was unavoi­dable and very noticeable in North-American traffic. Freight tariffs for general traffic in 1933 was some 35% lower than in the middle of the twenties when the freight crisis was at its worst.

The recension of 1929 led to further shrinkage. By the middle of 1932, 3.211.000 gross tonnage of the American fleet was put in mothballs. This meant 14% of the total extent. The United Kingdom had only dismantled 18% (3.470.000 ton). Germany (33%) and France (28%) were the two countries that markedly preceded the USA.

 

2. Commercial agreements, the subsidising of shipping lines, shipping companies


In 1832 diplomatie relations were entered into with the USA and already the following year a plan for a treaty was being considered in Washington. Brussels dared not go against the unyielding attitude of Great Britain, who wanted to protect her maritime interests with the argument that Belgium was neutral in status.

The discriminatory taxes to which all foreign ships in Belgian ports were subjected provoked repercussions, as in the case of the Belgian ship "Antonins" (1835).

The demand of the American government claiming compensation for the destruction caused by the bombardment of 1830 was not met (4,819,165 BF). This and other difficulties including the venture with the "British Queen" did not induce confidence. The outcome was that when America decided to run a mail boat service to Europe, Antwerp missed its chance and Bremen got priority.

The first treaty was signed in 1845 and included the mutually agreed abolition of the discriminatory tax (art. 2, 3) and the most-favoured nation clause for imports and exports between the ports of both countries (art. 8, 9). On 17th July 1858 a new bilateral agreement was signed whereby a reciprocal arrangement was ratified. Till then Belgian ships coming from outside Belgium were subjected to differential duties. In 1875 a new agreement was signed in which the most-favoured nation clause was corroborated (art. 12) and it remained valid till alter the First World War. With reference to the new tariff regulations in the USA (the Mac-Kinley protectionist system), a 20% reduction was offered to states that were prepared to make similar concessions. In 1899 the Antwerp Chamber of Commerce requested the Belgian government, apparently in vain, to show some flexibility in their customs policy with regard to American cattle and meat imports. The depression in 1929 brought about a return to protectionism. Later, the commercial agreement of 27th February 1935 aimed at establishing a new procedure, and Belgium was the first European country in which this experiment was put into effect. The most-favoured nation clause was retained. A decrease on 47 tariffs was allowed to Belgium, which provided for a margin that fluctuated between 16% and 50% and, according to the new tariff, increased our export products to the USA by 8%. The same was true of the Belgium Luxemburg Economic Union, which also made allowances to car manufacturers, for instance. The devaluation of the Belgian franc made no difference to this agreement.

The setting up of a shipping line to the USA in the first instance lay within the domain of the government. In May 1840 a bill was brought before parliament enabling the government to finance a regular service. The Belgian Ambassador to the USA was in favour of this idea. The decree of 29th June 1840 voted a yearly subsidy of 400,000 BF for a period of 14 years. Owing to the absence of private enterprises, the government took it upon itself to buy two vessels, the "President" and the "British Queen", belonging to the British and American "Steam Navigation Company". The first ship went to the bottom of the sea before delivery, yet despite this the "British Queen" was purchased for £143,5000 stx. Later, a control commission was to sharply criticize the contract and quite rightly too. An agreement was reached with the shipping line Catteaux-Wattel of Antwerp, but the scope for development that the government had in view was far greater than that allowed for by legislation. The ship made three voyages in 1842 (leaving Antwerp on 4th May, 7th July and 7th September). In that period the ship carried a total of 219 passengers on the round trip and transported cargo to the value of 32,225 BF, an average of 36 passengers and freight worth 5,370 BF. It was especially the return cargo that remained insufficient. The three voyages produced a loss of 338,508 BF. This total rose higher still owing to additional costs and losses. Various factors for this misadventure were singled out : the state, having no experience or insight, was quite unsuited to run a ship ; the government had demanded an undertaking that only Belgian coal be used, which required five sailing ships to be laid on to transport it ; the "British Queen" with accommodation for 280 passengers accepted only cabin passengers, whereas the greatest demand was for cheap transport for emigrants.

Subsidised sailing ships remained in existence. The Royal Decree of 13th April 1843 stipulated eight sailings a year. Encouraged by the example of other countries, the Belgian State on 29th May 1853 signed a contract between the shipowners Willem Nottebohm, Eduard Weber and Spilliaert-Caymax with a view to establish a profitable shipping line with a regular service to New York. The shipowners promised to lay out a capital of 5 million BF. The state bound itself to a subsidy of 1,200 BF per return journey and guaranteed a 4% return on the capital. Owing to insufficient capital, far too small a subsidy and bad management of return cargo, the "Société Belge de Navigation à Vapeur Transatlantique" experienced such losses that she had to go into liquidation in 1854. Then the "Liverpool, New York and Philadelphia Steamship Company" took over and continued to ply between the USA and Europe with departes on Wednesdays from Liverpool. Embarkation from Antwerp took place three days earlier. The "Service de Navigation Régulière à Vapeur entre Anvers et New York" also had regular departures on Wednesdays, with a similar service for Antwerp, except that the voyage began from Southampton. The ships were owned by the "Hamburg-American Steamship Company" and the "German Lloyd Steamship Company".

Owing to lack of sufficient fonds from the private sector, the Belgian government was forced to call upon the assistance of foreign shipping fines to build up a regular packet service overseas. So it came about that the state subsidised the "Lamport and Holt" shipping line to ply between Antwerp, Brasil and La Plata, half these ships sailing under the Belgian flag. In the year 1886 the "Norddeutsche Lloyd" received a yearly subsidy of 80,000 BF to sail to Australia and the East Indies, etc.

 

  

                                                                                

    

 

To be followed