The Collaborative International Dictionary of English v.0.48:

Subsidize \Sub"si*dize\, v. t. [imp. & p. p. Subsidized; p.
   pr. & vb. n. Subsidizing.] [From Subsidy.]
   To furnish with a subsidy; to purchase the assistance of by
   the payment of a subsidy; to aid or promote, as a private
   enterprise, with public money; as, to subsidize a steamship
   line.
   [1913 Webster]

         He employed the remittances from Spain to subsidize a
         large body of German mercenaries.        --Prescott.
   [1913 Webster]