The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo.
WEDNESDAY, APRIL 14, 1909. SUBSIDIES AND MAILS.
Tor the cause th*t uckt asittUmce, For the vorong that needs resistance, Tor the future in the dUtenee, Ant the f>o94 that toe cun dm.
The decision of the Cunard Steamship Company to declare no dividend this year, but to use its profits to cover depreciation and interest will hardly surprise anyone who hae followed the course of event 3 in the shipping world ■with any interest during the past twelve months. Alongside this piece of information we may set the intelligence recently cabled to us that the NordDeutscher Lloyd Company lost over eight million, marks in 1908, and that the Hamburg-Amerika Company had failed to declare . a dividend for the first time for fifteen years. It must be remembered that these two great shipping , companies are very heavily subsidised by the German Government, and that the Cunard Company itself draws £ 150,000 from the State on account of the new turbine steamers which have regained pride of place for British shipping in the Atlantic. And taking all these facts in conjunction, it is impossible to avoid the inference that the richest and greatest shipping companies in the world are suffering from the joint effects of a common cause. What this baneful influence may be is indicated clearly enough in the statement recently pub--1 listed by the Hamburg-Amerika directors to the effect that excessive competition in the Atlantic trade and the enormous outlay entailed by' the new record-breaking steamers, are sufficient to account for the company's comparative financial collapse. The two German companies and the largest T2nglish company—all three heavily subsidised— have done their best to make a financial success of the huge record-breakers, and so far their unanimous verdict is an admission of complete and disheartening failure. ■ ........ Considering the enormous size of steamers of the Kaiser Wilhelm and Amerika clajj—to. say nothing, of the Lusitania and Mauritania—their elabor-
j ate and sumptuous: equipment, and.:th,e huge incidental expenses-incurred in run* ning them, we 'can hardly wonder thai even a temporary depression in trade .would convert, them into "whfte elephants" of a most ruinous kind. But far more than the magnificent fittings and extravagant living on board these floating palaces, what is chiefly responsible for the losses they entail is the expense of attaining the high rates of speed that modern engineering and maritime competition have rendered necessary. The cost of running a large steamer above, say, 18 knots increases with startling and altogether disproportionate rapidity for every additional knot of speed required; and the difference in working! expenses between, say, a 2>l or 22 knot boat and the L-usitania is simply asr founding. It is the determination of the German and British shipping companies to endure no rival and to drive their huge steamers at an ever-increasing speed that, more than anything else, has crippled their finances and brought them to a point at which one or other of them must perforce call a halt. And the moral to be drawn from these comments for our own benefit is that if we attempt to establish mail service or steamer communication with other countries at anything like a high rate of speed, we must keep in mind the fact that working expenses rise with speed in a constantly increasing ratio, and that the advantages of an extra knot or two per hour, or the saving of a day or two per trip, may compensate us temporarily and very inadequately for the complete financial failure of our enterprise. This criticism is, of course, directly applicable to the famous All-Red scheme' which is now being actively discussed in England, Canada, and Australasia. It is now generally admitted that to bring New Zealand within three weeks of London, as Sir Joseph Ward originally suggested, is practically impossible; but Mr. Seftbn, the Canadian ex-Minister for the Interior, holds that a 24 or 25 days' service from Auckland to Ixmdon is well within our range. This would mean a 24-knot service on the Atlantic and 18-knot boats on the Pacific route; and the total subsidy required to keep the service going would be £.1,000,000. Of this groat sum. it is assumrd that Great Britain would pay half and Canada about one-third, while Australia would pay £ To.OOO, and New Zealand £ 100,000 a year. Considering the magnitude of the subsidies required, we may well ask if the colonies are likely to get any advantage commensurate with their outlay. In the ciusp of Australia, all that she now pays for the existing Vancouver service of 34 or 35 days is about £26,000 a year. All that New Zealand paid for the San Francisco service of 28 or 29 days was about £ 17,000 a year, of which, as we have often shown, a very large proportion was directly returned to us. It seems to us very much open to doubt whether it would pay us to supplement our existing .Suez and Vancouver mail facilities by a service costing another £100,000 a year for the gain of these few extra Jays. It must not be forgotten that nil wo could expect to get out of the service in the way of postage charges and contributions is from £17,000 to £ 18,000 a year. Taking all these facts into account, we may reasonably hesitate about embarking 'on a scheme which would increase our annual liabilities so heavily for very little corresponding advantage.: We admit that from the patriotic or Imperial standpoint, there is a great deal to be said for the "All-Red" route. But it seems to us that the proposal to run. a special service; at an extremely high rate of speed on either Atlantic or Pacific routes is not. under existing cir-! cumstancee, financially sound, and that unless we can be content with a moder-, ately fast service, and decline to follow the somewhat spectacular suggestions put forward by the promoters of the scheme, we are likely to find the experience of the Cunard and the Ham-burg-Amerika, and the Xord-Deutecher Lloyd repeated in our own unfortunate case.
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