TRACTS FOR THE TIMES.

Auckland Star, Volume LXV, Issue 143, 19 June 1934, Page 6

TRACTS FOR THE TIMES.

WORLD SHIPPING. (By PRO BONO PUBLICO.) There have been reports, in the papers of international negotiations to get rid of the surplus merchant shipping of the world. Every country has been building new ships, many of them with .We aid of heavy Government subsidies, and as okl ships have been sold and not broken up, the surplus tonnage, to use one shipping man's word, is ''colossal.," The subject has been discussed by the chairman of every shipping company during the last few years, but nothing useful has been done. .Now, however, the leading companies in the world are understood to be.'in negotiation in the hope of' working out some sort of scheme. • It is not only the slump that has caused the glut of tonnage. Long before the crash came the shipping business was getting into a bad position. It was the American policy of building all sorts of merchant ships during the war that gave the trouble its real start. These ships were disposed of by the Shipping Board after the War, and companies were formed with little or no capital to take them over, the Government accepting ridiculously low priccs and then advancing the money for their purchase at a very low rate of interest. If the Americans had stopped at that the results would not have been so had, but the Government continued to lend money for building and in addition paid extravagant subsidies. Italy and France then took a hand in the subsidy game, and so did Japan. Germany, of course, had to build to replace her lost ships, and the British companies had to modernise their fleets. While tiie number of merchant ships was increasing there was also a movement to build bigger and faster ships, and the new vessels could thus carry more cargo and make more frequent voyages. About 4o ,000,000 tons of merchant shipping were afloat in 1914. Last year the tonnage afloat exceeded 70,000,000. According to figures compiled by a department of the League of Nations, the speed of ships has increased by over 20 per cent • and the average tonnage by 40 per cent. Then since 1928 there has been less cargo to carry, and passengers have been fewer. The value of world trade dropped by 10 per cent in 1930, by 28 per cent in 1931 compared with 1930, and by 34 per cent in 1932 compared with 1931. In quantity the drop, of course, was not so pronounced. "Freight rates generally seem to have got down pretty close to the pre-war level.

It is not surprising- to learn that 20 per cent or 30 per cent of the world's shipping is idle. It is stated that about a million tons a year have been scrapped since the slump commenced, but, on the other Land, building has continued under the subsidy schemes, so that the outlook is not really improving.