THE SHIPPING WAR.

Auckland Star, Volume XXXVII, Issue 164, 11 July 1906, Page 3

THE SHIPPING WAR.

STATEMENT BY MR. W&J. C. DAWES.

FACTS [REGARDING THE NEW ZEA LAND SHIPPING COMPANY",

Mr. William C. Dawes, chairman ot directors of the London Board of the New Zealand Shipping Company, has handed to the Press a manifesto for publication, in which the following statements appear:— '"As attempts have beep made to irepresent the direct lines of steamship companies trading between England and New Zealand as a. 'combine,' injurious to the interests of New Zealand shippers and producers; and further, as it has I been suggested that shippers and producers should support the Federal-Houl-der-Shire combination for the purpose of breaking the alleged 'monopoly of the direct lines, I should be obliged if you will allow mc to lay the following facts of the case before the public. ■ "Speaking more particularly on behalf of the New Zealand Shipping Company, which I represent, I would point out that' it was originally formed in the colony, that its shares are largely held there, and tha* throughout its history it has identified itself with the colony's interests. It has not only endeavoured to meet the requirements of the Government from time to time, hut has suffered very heavy loss in so doing. In 1901, for example, we did our utmost to open up the South African market to New Zealand producers. On the 21st March we despatched the Otarama, on the 25th July the Tekoa.and on the 21st December the Otarama. This attempt involved my company in a loss of several .thousands of pounds, and the service having thus been proved to be non-pay-able, was discontinued. The Shaw. Savill, and Albion Company despatched the Rangitira and Pakeha, and the Tyser line sent the Indramayo the same year, also with the most unsatisfactory results as far as those companies were concerned. It should bo borne in mind that all the steamers named were sent by the direct lines without one penny of subsidy from the Government. The Federal-Houlder-Shire line, which, under the name of the New Zealand and African Steamship Company, subsequently obtained a Government contract, received a subsidy of £ 30.000 per annum for three years, and at the cml of that time abandoned the service as unprofitable. "As further evidence of our willingness to meet the Government in their desire to open the South African market, I may mention that Aye tendered for the service when it was originally offered, and again on the 31st January last. On the latter occasion our tender was the only one sent in, but it was not accepted. On the 31st May last we sent in another tender for the same service, in response to an invitation from Vie Department of Industries and CommArce. "In regard to the direct lines and the Federal-Houlder-Shire combination, I may explain that we were willipg from the first not to interfere with their mi- i tiation of a West of England service, via South Africa. The direct liners, in fact, agreed in March, 1004, with Mr. Allan Hughes, who controls the Federal-Houl-der-Shire combination, not to place any obstacles in the way of New Zealand shippers their meat and other cargo by tho N.Z. and African Steamship Company vessels direct to West Coast ports f in consideration of which . Mr, Hughes agreed to leave the existing service to London to be continued by tho direct liners. We on our part adhered strictly to the terms of .this arrangement, but it was broken by the Federal l Houlder-Shire combination, on the 2nd May last, when they despatched the s.s. Dorset for London direct, and advertised other steamers to follow. This not only affects the other shipping companies, but the New Zealand Government, and New Zealand producers, since it involved the abandonment by the New Zealand and South African eomp£>y of the direct 5 r est Coast service, in consideration of hich they, receive special preferential treatment from the Government in regard to Government -cargo. That service having been given up by the company which had undertaken to carry it on, we on our part had no hesitation in ' putting on steamers for West Coast ports, and sailing dates of these are vow advertised. '•The excise given by the Federal-Houkler-Shire • combination for departing from their undertaking and giving up the West Coast service was, that they found it unprofitable, and insisted upon the New Zealand Shipping Company and the other direct lines guaranteeing that the entire fleet of the Federal company controlled by Mr. Hughes, should be employed profitably in New Zealand, or otherwise he would exploit the London trade. This- undertaking the .direct liners declined to give. "So far from the direct liners being in possession of*a specially profitable monopoly in the carrying trade of New Zealand, the business has, up to the prese-t time, been carried on with very much greater advantage to the shippers and producers than to the shareholders of the New Zealand Shipping Co., and the Shaw, Savill and Albion Co.. whose money is sunk in the undertaking. For years the dividend paid by the Shaw, Savill and Albion Company to its shareholders has not exceeded 5 per cent., and in 1904 the company had to transfer £12.500 from the repairs and renewal fund to enable "it to pay a 5 per cent, dividend. The shares in the New Zealand Shipping Company were originally £10 each fully paid-up, hut it was found necessary in the year IS9O to write off £2 per share, which meant a loss to the shareholders of some £120.000, all of which was incurred in developing the froze* meat trade, which has done so much for the farmers of New Zealand. Furthermore, for several years, no dividends at all were paid to the shareholders. From 1894 to 1900 they only received dividends at the rate of 4 per cent, per annum on the reduced capital, equal to 3.2 per cent, on the amount actually contributed. From 1901 to date the dividends have not exceeded 5 per cent, per annum on the reduced capital, or 4 per cent, on the original capital. Moreover, the market price of this company's shares today is only £;> 15/- for each £ 10 subscribed, which practically 'means a loss of capital" of £4 5/- per share, so that on to-day's values shareholders in the New Zealand Shipping Company have lost over £250, 000 i:i developing the frozen meat trade of the colony. These facts clearly show that so far from excessive profits having been made out of the trade, the New Zealand Shipping Company has uot|even been able to preserve its capital intact. "Something has been said in regard to the contracts which have been entered into between the direct steamship companies and.t.he freezing works, and it ha v s been suggested that these create ft jncmopolj, y/imh is not in -the, $T9r J

ducers' interest. So far from this being the case, the contracts are decidedly beneficial, both to the producers and the freezing companies, and are indeed necessary to enable the latter to carry on their business satisfactorily. The shipping companies agree to provide tonnage whenever called upon in consideration of receiving all the meat the freezing companies have to offer. "U the shipping companies were not obliged to clear the cold stores when required, the freezing companies would find their works blocked to the inconvenience of their farming clients. For instance, the two Canterbury Frozen Meat Companies in the busy season kill over 400,000 sheep in a single month, and it is scarcely necessary to point out the convenience to these companies of obtaining a weekly service of properly insulated steamers to keep their works clear. This necessary weekly service has been provided by the two pioneer companies—the Shaw, Savill and Albion and New Zealand Shipping Companies. It is scarcely neecssary to add that the shipping companies would not have ventured to build sufficient additional steamers to provide a weekly service unless assured of support from the shippers. "I will ask the public generally to consider the position of the opposing service, and to weigh carefully and inpartially the question as to" which of them is the more entitled to support and recognition. On the one hand you have tho pioneer lines, which established the frozen meat industry, with the result of immensely benefiting the colony of New Zealand, but at- the co.-t at the outset of heavy losses to themselves, which they have- not yet been able to recover. Speaking more particularly for the New Zealand Shipping Company, which I may be supposed to know something about, I would point out that its steamers were built especially for the colony's requirements, and the company has always studied the' interests of New Zealand merchants and shippers, who, I believe, are Teady to recognise and appreciate jtbis fact, It was pointed put at

the last annual meeting of the company that the direct lines expend very large sums in the colony, which in the case of the Federal-Houlder-Shire combination, are disbursed elsewhere. For instance, the New Zealand Shipping Company always uses exclusively New Zealand coal on the Homeward voyage, and it buys large, quantities of stores in the colony. During the year ended June 30, 1905, it disbursed £80,000 in New Zealand for stores and labour, in addition to £45,000 for coal, and £20.000 for port dues, making a total of £150,000 iocally expended, a very large proportion of. which goes to the direct employment of New Zealand labour. On the other nand you have a foreign-owned combination coming in and seeking to reap in a field in which it has not so,vn. Its steamers are built for other trades. It buys the bulks of its stores outside the colony. Its largest interests are not only situated beyond New Zealand, but in many respects are inimical to the interests of that colony. It has a controlling influence in certain Australian freezing works, and large interests in similar undertakings in the Argentine. While the New Zealand and South African Steamship Company was drawing £30.000 a year from New Zealand taxpayers with the supposed object of developing a trade between New Zealand and South Africa, its .steamers were calling at Australian ports en route and depressing the market for New Zealand producers by the cheaper cargoes which the same" subsidised "steamers carried from Australia to South Africa. A similar policy is being pursued with the steamers which the combination is now despatching from New Zealand to the United Kingdom. The s.s. Morayshire, for example, -which left Tiniaru on January 30 last, called at Puntas Arenas, in Magellan Strait, and took on board frozen meat which no doubt competed in the London market against the New Zealand consignments. In the same way the s.s. Somerset, which arrived at Monte Video on March 21 las|-. took on board a quantity of frozen meat from the-Argentine works in which the combination has so interest."