CHEAPER OCEAN FARES.

Auckland Star, Volume LIII, Issue 103, 3 May 1922, Page 8

CHEAPER OCEAN FARES.

WHAT ARE -THE PROSPECTS 7 r. AXD O. DEBENTURES. s (From Our Special Correspondent.! LONDON, March 14. A welcome note is being sounded in shipping circles—fares are to be reduced in the near future. This to the Domi nion means that many held up from a long-desired trip Home may begin tc plan an earlier one than they had anti cipated. Many liners during the last few weeks, it is reported, have left these shores with only a handful of passengers on board and there have been anxious conference; during the past few days of shipowners to decide what can be done. Two reductions in wages have already been agreed to, and there has also been a considerable drop in the cost of stores and provisions on. board. Those liner?, too. that 1 rely on oil instead of coal have found their working expenses lower. But insurance still remains a heavy charge in view of the abnormal increase in capital values. Port charges show little sign of decrease, and the wages of dock employee? continue to be very high. Repairs and alterations are still expensive, but it is clear that fares must reach a more rea- ! sonable level if the present losses are to Ibe cut. This will entail a further i decrease in capital values through inj terest on capital as well as further drops jin wages at the ports, but in the opinion ', of a well-known shipowner passenger fares must come down in the near future. One can spy other straws that show the trend of the stream. There is keen rivalry between the two great shipping lines, Cunard and White Star, and the spring will witness the opening of a great competition for the Atlantic traffic between these two premier lines. For the moment the issue is not likely to be one of rate-cutting, but as to which can offer travellers the best speed in the greatest comfort. To this end the Cunard Company will have in commission the Mauretania, the Aquitania, and the Berengaria (the last-named is nowbeing reconditioned on the Tynel, all of them oil-burning liners, while the White Star will have the Olympic, the Homeric and the Majestic. These six great liners, which will give the public two sailings a week on the Southampton-Cherbourg-New York route, occupy an unchallenged position in transAtlantic travel. Present costs of shipbuilding prohibit the construction on a commercial Dasis of competitive ships of a mammoth size, and American passenger shipping has become a negligible factor owing, it is stated, to three main causes—inability to buill good, modern liners or to train crewj satisfactorily, and the effect of the prohibition laws on their ships. Shipping experts who sailed on the Mauretania from the Tyne were confident that the two big British lines have nothing to fear from American competition. Sir Thomas Royden, M.P., the Cunard chairman, told the guests at dinner on board the Mauretania last night that they were looking to her to break her own record of 26 knots, and any new one that might be set tip by a competition The public are showing no lack of confidence in the capacity of our shipping to make good, for the f3,500.000 P»and O. debenture stock at 5$ per cent, issued yesterday at 9GJ was subscribed in little over an hour. In addition to this issue the directors propose later on to apply for powers to issue a further similar amount ranking with the present issue, making £7,000,000 in all. This and any such further issue will be secured by trust deed as a floating charge on the undertaking and assets, ranking next after the £1.487.560 existing 3& per cent debenture stocks. The proceeds of tln> issue are to be applied to the general purposes of the company, and especiallj to the construction of new vessels when prices come down to an economic ftgure. The prospectus gives no details of profits, but it is stated the cash dividend distributed during the last ten years on the preferred and deferred stock has averaged £503,279, while the interest on the present stock rec.iires £192,500. The directors consider that the company's assets are more than sufficient, after discharging all liabilities, to repay the £3,000.000 of preferred stock at par and the £3,500,000 of deferred stock at its present market price, which is over £300. In arriving at this conclusion steamers of greater age than 20 years have been valued at a nominal £1000, and ster.mers ■built or now being built at "boom" prices are taken at pre-war costs.