evious to 1886, for a quarter of a century and more, postal
subventions had been given to private commercial houses, or individuals,
providing steam communication with the Spanish colonies and foreign
ports; but much of the service during that period had been performed by
this company through cessions from the holders of the contracts. Before
the adoption of the private contract system, the service to the colonies
had been performed by the first regular steamship line between the
Peninsula and the Antilles (in 1850), established at the State's
expense. The ships of this line were all under the command of officers
of the navy, and performed various services for the Government besides
carrying the mails and despatches.

Under the contract of 1886 (ratified by the Cortes in 1887) the company
were to furnish all the mail steam communication between the Peninsula
and the colonies and possessions, and foreign ports, for a total maximum
subvention of 8,445,222 pesetas ($1,689,044) annually. The subsidy was
calculated on the number of nautical miles run. The total sum was
distributed among the budgets for the Peninsula and the several
colonies.[DZ] In 1909 the subvention was redistributed over the various
lines, the total amounting in round numbers to $1,665,600. The contract
went as a whole also to the Spanish Transatlantic Company, to run for
twenty years. A particular requirement was that the company must favor
Spanish trade in every possible way.[EA]

The first construction subsidy law, that of 1880 (June 25), granted a
bounty of forty francs ($7.72) per measured ton of 2.83 cubic metres on
all ships built in Spain. All tariff duties paid on imported materials
for building, careening, or repairing ships or their machinery, were to
be refunded by the Government.[EB]

During the decade between 1880 and 1890 the Spanish marine slowly
increased. Further to foster it, in 1895 a more general subsidy law was
enacted. This act granted a construction subsidy of forty pesetas
($7.72) per gross ton for wooden ships; seventy-five pesetas ($14.48),
for iron and steel steamers; and fifty-five pesetas ($10.62), for ships
of mixed construction and for sailing-ships of iron and steel.[EC]

The year following the passage of this law was marked by rapid expansion
in the national marine. Then came a more rapid decline. This was due, it
is assumed, to increased taxes, and business depression occasioned by
the colonial wars, involving enlarge