NORTHERN CO.

Auckland Star, Volume LXV, Issue 127, 31 May 1934, Page 9

NORTHERN CO.

(Extended Report.by Arrangement.)

ANNUAL MEETING.

CHAIRMAN'S REVIEW.

RAILWAY COMPETITION.

UNFAIR METHODS ALLEGED.

Tho annual meeting of shareholders of the Northern Steamship Company, Ltd., was held at the company's office this morning. Mr. E. Davis, chairman of directors, presided over an attendance of 40 shareholders. The chairman, in moving the adoption of the annual report and balance-sheet, said: — '•Before I pass to consideration of our report and balance-sheet, the painful duty falls to me to record the death some months ago of our valued colleague and chairman, Mr. A. B. Roberton. I recall our loss with deep sorrow, a sorrow which is shared by the whole board. "Tho directors have appointed Mr. Edward Anderson in his place. The association of Mr. Anderson's name with our institution goes far back into its history, the late Captain H. E. Anderson, his father, being one of the founders of the company, and I am sure the shareholders will join with me in feeling fortunate in being able to welcome him to a seat on our board. I take this opportunity of offering Mr. Anderson, on behalf of the company, its heartiest congratulations on his appointment as a director of the Reserve Bank of New Zealand, and tender to you his apology for his absence, as he is to-day attending, at Wellington, the first directors' meeting of the Reserve Bank. "I am fully seized with the fact that shareholders want dividends, not speeches, but, as I cannot on this.occasion offer you one, may I impose on your patience to refer to a few matters of interest to our company's affairs. "The year has not passed without considerable anxiety and worry, due not only to the continued depression of trade, but to the very unfair competi-

tiou by tho Railway Department. This Department has carried out a most aggressive freight cutting campaign, which has particularly been directed against shipping. A system of hiring a complete truck to any one consignee, which can be filled with any class of goods and railed to certain stations for a lump sum, has been instituted. In order that you,should thoroughly understand the position, it is necessary for me to explain it in detail. Truck System Explained. "The 'truck system,' as it is commonly known, was put into operation on the northern line during,' the month of August, 1033, and is still being operated. By this system a 12-ton truck of general cargo is being railed to Whangarei for £7, equal to 11/8 per ton, against our boat rate of 20/, whilst the usual average classified rail rate for general cargo (class A, Bj C and D) is 59/10 per ton. General cargo per truck system can be sent to Kaikolie, a distance of 189 miles, for 15/ per ton, while the average classified rate is 70/2 per ton.

"Dargaville sugar, which, in the ordinary course is railed to Helensville and then taken by steamer to Dargaville, is nowi-being sent by th& truck system to Whangarei and motored to Dargaville. The railway received 21/ per ton to take the sugar 38 miles to Helensville, whereas under the truck system they only receive 11/8 per ton to take sugar 130 miles to Whangarei. On a 12-ton truck of sugar sent in this way to Dargaville, the railway lose £5 12/ freight, and haul the sugar an-extra 92 miles; the Kaipara S.S. Company are losing the whole of their freight, £9 18/, and the county council the Dargaville wharfage of £1 4/, and the local bodies the ratio cost of road maintenance. "As there are no restrictions as regards the class of goods sent under the truck, system, benzine, which is by law classed as 'dangerous goods,' and treated as such by shipping companies and harbour boards, has been forwarded under the truck system with other cargo stowed in the same truck. In some cases, the oil companies having paid truck rate for the benzine, the additional goods carried on top of the benzine have been carried freight free. "As this truck system, if put generally into practice between coastal ports, would most certainly wipe out all coastal shipping, and seriously embarrass many harbour boards who are committed to loans, two large deputations, consisting of the Harbour Boards' Association and Shipowners' Federation, waited upon the Railway Board. It can only be said that as a result of these deputations the truck system has not been extended, but is still in existence on the North Auckland and Wellington3'almerston North lines. "To protect our business and retain the trade which, through years of service, we have created and built up, we have been forced to meet this unfair and cut-throat competition by making drastic reductions in our rates. Much of Trade Regained. "As a result, we have regained a great deal of the trade taken from us since the truck system was instituted, but only at an uneconomical rate. The activities of the Department were not alone confined to the northern district. During the early part of the financial year just past we have had to meet freight cutting on Te Puke cargo. Up to this time all cargo received by the company for Te Puke had been sent by boat to Tauranga and railed to Te Puke, another co-ordinated service. The Department reduced the rate on goods Auckland to Te Puke from an average rate of 69/6 on A, B and C goods to an all-round rate of 51/ G. "Unfair and undue influence was brought to bear on the local storekeepers, who were virtually compelled to sign a twelve months' agreement with tho Railway Department to transport all their goods direct from Auckland by train, otherwise they would lose their customers' trade. "Again the company had to take measures to retain its business, and as the railways were not prepared to carry on the co-ordinated service, which had been in existence since the line to Te Puke had been built, we were forced to coordinate with a motor service and deliver the goods on a through rate basis. "It is universally recognised that transport is one of tho greatest problems of the day. In most countries, particularly Great Britain, every effort is being made. to_ co-ordinate the various methods of transport to minimise the high economic waste of to-day, whereas cutthroat' methods are being adopted in this Dominion.

Shipping companies cannot compete j against such methods, and consequently must suffer loss of business, which is economically and legitimately theirs. It goes without saying that such rates as charged under the truck system cannot possibly bo claimed as payable, and are unsound, and would not be retained once the shipping competition is wiped out. The truth is daily becoming more evident and insistent that unlimited State competition is incompatible with reasonable security to any form of business. Many important industries in this country receive protection in some form or other, but not the important industry of shipping—the very reverse has been the case here. Protection In England. "Again, there is the national aspect to bo considered. In Great Britain it is recognised that the coastal shipping must be protected -from harmful competition. Permit me to tell you, that in the recent Road and Rail Traffic Act, 1933, which became law in England in November last, 4 adequate protection is given to coastal shipping, inasmuch as should any railway company make any agreed charges, or give exceptional rates, which place coastal shipping at an undue or unfair disadvantage, or are inadequate having regard to the cost of affording tho service or services in respect of which they are made, the matter may be referred, through the proper channel, to a freight tribunal. If, after investigation, the freight tribunal decides that such rates have a prejudicial effect upon coastwise shipping and undesirable in the national interest, such tribunal may, by order, cancel or vary them. I ask you, ladies and gentlemen, why should we not have similar protection here? "We are islanders, like Great Britain, naturally a maritime country, and the shipping services, I contend, are Isew Zealand's very life's blood. "Sir Archibald Hurd, in 'The Shipping World,' when speaking of the coastal vessels, made the following statement, which is so true: —'Because these British coasting vessels are of small tonnage, their fate is not to be regarded as of little consequence. The very cradle of British power is in peril. These ships are essential to our future. The coasting ship is the father of the tramp, as the tramp is the father of tho liner. That is the record of our maritime development.'

"I would assure you, ladies and gentlemen, that as freighters we are ready, and always have been prepared, to co-ordinate on an equitable basis with all means of transport, as we recognise it is only in this way that the enormous economic waste in transport which is going on 10-day, that may surprise you runs into millions, and for which the public is paying, can be stopped.

Work of Pioneering. "So much for coastal shipping generally, but in the case of the Northern Steamsliip Company there are other and special reasons why the existence of this company should not be challenged. This is not a question of tho survival of the fittest. This company was formed some 53 years ago by business men of Auckland to pioneer and give means of transport to the outlying and isolated districts of the province. In many places where there was no authority to provide accommodation, wharves and sheds were built by the company, and the use of these given to the settlers free of cost. Many services were run at a loss, *but were the means of opening up the backblocks, from which to-day we are reaping our produce harvest. "The company has in the past given employment and a livelihood to thousands of workers. Any loss of this is a serious matter to the waterside wage-

earner. During the last year we have employed some 773 men, and paid well i over £100,000 in wages. We have spent £12,000 in repairs, £12,000 in coal and fuel oil; whilst harbour boards have benefited by some £27,000. Our expenditure with the merchants alone amounted this year to £48,000, all of which are direct benefits to the com- i munity. "Whilst it may be possible for the railway to .cater for some of the districts to which we trade, it would be quite impossible for this department to take the place of the Northern Company and give to the public of this province the service it receives at our hands to-day. "This now brings us to the balancesheet figures. The net profit, after providing for all repairs, but not depreciation, is £11,222 18/5. Your directors have given full and careful consideration to the value of the assets. .A return of improved trading conditions would have justified the retention of these figures, but with the continuation of the depression in tho shipping industry, which, as you know, is world wide, it is prudent that these values should be reduced. "Through negotiations it was hoped, for some years, of the idle steamers laid up in the harbour, that sales for at least the largest of them would be found in the East, but we are now in receipt of , advice that the possibility of disposing of these ships in this market could only be done at breaking-up prices. Wo had in our insurance reserves an amount of £59,569 2/4, which the directors in the past took as a set-off against these idle vessels. As we are no longer running large passenger steamers, and our fleet is fully insured, a reserve at this figure was not necessary for insurance purposes. It is therefore recommended to transfer . from these insurance reserves to the depreciation account £40,000, together with the net profit of £11,222 18/5, making a total of £51,222 18/5. Provision For the Future. "There* will still remain in the reserve accounts an amount of £19,569 2/4, which your directors think is ample for future requirements. The carry forward from last year, £1815 14/8, will again be carried forward. Further depreciation of the assets is also*recommended, and will be placed before you at the extraordinary general meeting to be held immediately after this one. The working fleet has been maintained in good order, all replacements being charged against working costs. The sum of £12,534 was expended during the year on maintenance and repairs. "No company, of course, can count on success, particularly in such difficult times as those through which we have been, and still are, passing, without the good work and loyalty of its officials and staff. Your company can indeed be proud of the way in which it is served by its entire personnel and I should like to record your appreciation of their services. In particular I would like to say a word in praise of the unceasing and untiring efforts of our general manager. Captain Hammond, also the members of our sea-going staff, who have maintained their accustomed high standard of efficiency, loyalty and devotion to duty despite the hardships involved by the reduction of employment due to'shipping slump and the contributing factors just mentioned by me. "As is obvious, it is very difficult to visualise the future, but as it appears to me, the general complexity of business and the utter perplexity of everyone affected, is slowly passing away as

tho world of commerce seems to be recovering its equilibrium, as expressed in the passing of tluf depression and the return to confidence. "Still, we must be very thankful her-i in Auckland that we have such a wonderful potential back country in . the North, the early settlement of which was carried out by the hardiest of our yeoman pioneers. I don't suppose in. any part of New Zealand has there been a greater struggle in the past for existence against manifold difficulties, want of capital, etc.. than in North Auckland. "It is the grit that these early settlers possessed in making good against seemingly overwhelming odds in the past, which is going to help carry them through in these times of stress. '

"I have in the foregoing tried frankly to place before you some of our company's difficulties, its position and outlook, and now beg to propose that the report and accounts for the year ending March 31, 1934, as submitted, be received and adopted."

Rates Charged by Railways. A director asked if the shareholders were doing their part to meet the competition of the railways. The chairman said the directors were doing all possible to protect the company's interests, but he would appreciate anything shareholders might do individually. Another shareholder asked if the rates being charged by the railways were payable to the railways. The general manager, Captain Hamni9iid, said in his opinion the rate was an uneconomic one.Messrs. E. Davis (chairman) and E. H. Rhodes were re-elected, and Mr. E. Anderson was clected to the directorate. Mr. G. O'Halloran *vas re-elected auditor. In moving a vote of thanks to the chairman and board, Mr. Brown said the chairman had given shareholders a piece of unedifying information of competition by the State to destroy an established company. lie was convinced the board had done all possible to meet the unfair competition. It was some comfort to the shareholders to know that their interests were the interests of the board.

Mr. Howe, in seconding tho motion, said tho shareholders, in having such solid men on tho board of directory had a lot to be thankful for. Sir. Davis, expressing his appreciation of these remarks, said nothing was more painful than to have to meet the shareholders and not give them a dividend. "I am not promising anything," he said, "but we will do our best to show you something next year. It is worth a great deal more than any honorarium to have the confidence of the shareholders, as expressed to-day." (Applause.) The vote of thanks was carried with acclamation. Thanks to Staff. Mr. E. Howe then moved a vote of thanks to Captain Hammond and the staff, remarking upon the fine spirit of efficiency and loyalty which ran throughout the company. Captain Hammond said that at the beginning of the year it was thought that conditions were going to be' much better, and all were full of hope. But the promise of better things did not last, aiul it was found during the winter moi-ths that the company was "up against it." Prices for butterfat received by the farmer dropped and were soon reflected in the freightiugs of tho company. The farmers' purchasing power was curtailed, and that means less goods were being bought by him. That particularly applied to manures. "The chairman only told you half me story of the competition we have to contend with from the railways," said Captain Hammond. He quoted instauces of charges made by the railways which he said were uneconomic and with which shipping companies could not compete and conduct business on sound lines. Trade which had in the past been brought to the company's doors had now to be sought after, and the company had not been able to retain a proper rate of charges for freight owing to the cut-throat competition from the railways. Throughout the whole of the company's staff, from the heads of departments down to the waterside and . the office boy, there was a spirit of loyalty and co-operation.