The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo. SATURDAY, JULY 22, 1916. THE SHIPPING PROBLEM.

Auckland Star, Volume XLVII, Issue 174, 22 July 1916, Page 4

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo.

SATURDAY, JULY 22, 1916. THE SHIPPING PROBLEM.

For the came that lacks utitlfM, For the wrong that needs rtsittanee, For the future in the distance, And the good that we can do.

This war has been singularly prolific in statistics that have broken all previous records, but it has produced few effects 60 striking and significant as those set forth in the figures which reveal the profits of the great British shipping companies during the past twelve months. The most remarkable of these returns is that of the White Star Line, which, after deducting all

"excess" profits and taxation, and "writing off" heavily for depreciation and risk, actually shows a profit of close on two millions sterling, which allows a liberal margin for a dividend of 6.5 per cent. And these results have been secured in spite of the very heavy loesee due to the submarine campaign. No wonder that the commercial world, or at least that part of it which is not condemned to remain inactive juet now, is complaining bitterly of the lack of transport, the high price of ships, the impossibility o> building fast enough to meet the requirements of trade, and the enormoua freight charges which the fortunate shipowners are able to impose upon their victims. For the White Star Line dees not.etand alone—all the shipping companies in the world that arc able to keep up their running are reaping a bounteoue harvest. The "state of war", now so widespread has artificially reduced the freight tonnage available, and has at the same time prevcuted its enlargement or renewal; and so the shipowners, being in the position of monopoly holders, and having for all practical purposes "cornered" the world's mercantile marine, are able to charge what price they please to secure their indispensable services. We need hardly add that the effect of this unprecedented combination of circumstances k to the last degree injurious and oppressive to all the multitudinous producers and exchangers and consumers who depend more or leas directly on the world's ecaborne trade.

■We have referred incidentally to two of the most striking features of the pro sent situation—the prodigious selling value of ships, and the hagc freight charges exacted from shippers. A little statistical evidence on these points may be thought desirable. A 1,200-ton steamer, built in 1894, was sold in 1911 for £7,000, but was resold this year for £47,000. A 3,000-ton steamer, built in 1903, and sold at the end of 1913 tor £28,000, has just been resold for £78,000. An 1,800-ton steamer, built in 1895, was sold early in 1911 for £11,000, but was resold lately for £70,000. A 2,300-ton steamer, built in 1889, sold in July last for £21,500, but has just been resold f6r £56,000. We might prolong the list indefinitely, but these are suHieiently typical illustrations. It is notorious that any sort of a vessel that is likely to float through a voyage will now fetch a price that two years ago was far beyond the wildest dreams of the most sanguine shipbroker. But it shipping is to pay at these 6gures, Vα cost, must be "passed on," and so freight? have risen till, in general terms, thoy are from cix to twelve times as high a." they were in July, 1914. Here are a. few specimen rates selected from an article in a recent " Fortnightly Review ":—The. freight for rice from Burmah to the United Kingdom rose between 1914 and February, 1910, from 21/9 to 150/ per ton; the freight for jute from Calcutta to the Unitcu. Kingdom rose during the same period from 18/ -to 162/6 per ton; the freight on grain from tbe River Plate to the United Kingdom rose from 17/11 to 150/ per ton; whi!e the freight on coal from Wales to Alexandria rose from 9/7 to 73/9, and from Wales to Genoa from 8/9 to 77/6 pe' ton. These figures fairly represent the freight movement in the British shipping trade; but this state of affairs is by no means confined to our own mereant'lo marine. When we find that two of the smaller Japanese shipping compania- o--have paid dividends for the past year at the rate of 220 per cent and tjOO per cent per annum, and when we hear on the authority of the American Consul at Athens, that " freight rates have reached a point where the profit on a uofte voyage '» ttid to; be in excess ot

the value of the ship before the war.' , we can be fairly pure that this immense increase in freight charges extends' far beyond the limits of the area directlyaffected by the war, and is producing a strongly marked effect upon trade condi. tions on sea and land throughout tJie civilised world.

■ It is. of course, easy to explain how this extraordinary state of things has come about. In the first place, it must be understood that, though more than half the -world's whipping flew the' British flag before the war began, the number of vessels actually available for freight purpoecs in ocean trade was not so large as was generally believed. In place of the 20,000 ships given as the gross total in the Board of Trade Returns, it is now clear that there were fit for the purposes of British oversea trade not more than 3600 steamships above 1000 tons net, with a total capacity of about 10,000,000 tons. It is true that this tonnage stands for quite onefifth of the carrying capacity of all the world's merchant fleete. But wp must not forget that the war has thrown an unparalleled strain upon our merchant shipping, "and has, indeed, absorbed a large portion of it for the purposes of national' defence. If we put together the Admiralty's demands for transports, storeships, coal ships, observation ships, and merchant cruisers, and remember also that the British merchant shipping has been reduced since the outbreak of the war by nearly 2,000,000 tons through the submarine campaign and the operations of enemy raiders, we can easily understand what a tremendous burden has been thrown upon the - strictly limited amount of shipping still available I for legitimate eea-'borne commerce. And it muet not be forgotten that while over 6,000,000 tons of the merchant shipping of the enemy has been interned and otherwise driven off the seas, Germany and Austria, to eupply their needs, have been paying enorraoue freights to neutral countries for the use of their mercantile marine. All these circumstances have combined to limit the supply of merchant vessels, and thus to put shipowners in an impregnable position as holders of a close monopoly, for which they arc able to charge practically any price they please. But to explain these things is not to justify them, and the prodigious profits that the shipping companies have made out of their 'huge freight charges have aroused a great deal of indignant comment and protest at Home. It is maintained ill many quarters that on the outbreak of hostilities the British Government should have taken over all merchant shipping. just as it assumed control of the railWays. The State could have secured preference in sea-carriage for munitions and the necessaries of life; it could have laid down a fixed maximum for freight charges; and it could have not only arranged for the building of more merchant vessels, but it could have prevented the sale of merchant ships to neutral countries, and could have compelled ehipow-ncrs to confine their trading chiefly to British waters. There is no reasonable doubt that the shipping companies have made enormous profits out of the necessities of Britain and the Enipiu), while their.risks were largely covered' by Government insurance,. arid that the effect of abnormally high freights is severely felt in the enhanced co3t of living. Taking all this into account, we can hardly be surprised that a strong movement has been started at Home to induce- the imperial Government to intervene and end a state of tilings which has been described as a serious scandal, and, in view of our maritime ascendancy and our duty to our allies, an actual peril to our cause.