Commonwealth Shipping Line.

Press, Volume LIX, Issue 17702, 2 March 1923, Page 6

Commonwealth Shipping Line.

There are many things, that the State "cannot do which private enterprise " can do well, and one of them is ship- •• ping. :: Evidence of tie truth of this statement, made by Mr Massey in his speech in the recent no-confidence debate, is afforded by the Australian Commonwealth Government line, founded in 1916. which is already in so unfortunate a position that the only alternative courses of action appear to be either that the Government shall cut us losses and seil the whole line as a going concern, or that it shall thoroughly reorganise the undertaking, a process which would necessarily include selling a number of the steamers and writing down very considerably the values of the remainder. The fleet at present consists of 48 vessels, with three others nob yet out of the builders' hands. Oi the 48 nominally in commission—nine of them are at present idle—lß are exenemy ships, 11 of the Austral class, 6 of the I) class, 8 of the E class, and | 5 of the Bay class. The D and i. class steamers were built in the Commonwealth, for the purpose of . establishing the shipbuilding industry. Naturally their construction was extremely costly, and at that cost ttey were transferred to the Commonwea2th Line, some of them standing in the books at over £3O per ton, wfceiuas their value to-day is- not more than £7 per ton. The dead-weight capacity of the largest of them is only 5600 tons, and their size, combined with their coal consumption and low speed, make it impossible for them to pay for the heavy running expenses entailed by the large and highly-paid crews required by Australian law. They are described as being ''''failures as " trading units under, present condir j " tions." Some of the ex-enemy vesiels j of the Austral class, we gather, may never be employed again by the Government, a» the cost of repairs would be too great to allow of, the vesiels being profitable. A great majority of these vessels, including those built in Australia, have no refrigerating space, though this is demanded by the nature of Australia's export trade, and are consequently only useful - for moving wheat and wool. The total refrigerated space in the whole fleet of 48 vessels amounts only to 2,350,000 cubic feet and the five Bay liners, which are admittedly the best vessels in the fleet, account for four-fifths of this amount. But even their position is highly unsatisfactory. They cost a million and a quarter each, and their present-day value is estimated at not over £4OO,(XX). "At present high book values, working " profits are eaten up by depreciation, I "insurance, and working charges (aa- " suming that provision is made for the ;" latter)." "The so-called balance-sheets i " hitherto issued for the Commonwealth ; " Line do not attempt," adds the "By - ney Morning Herald," "to snow | '' the true depreciation in values of the I " ships. Roughly speaking the book " value of the 29 Austral and ex- " enemy ships must be written down by "one-half, about £'2,0C0,000; tie 14 "iD and E class ships by two-thirds, "about £2,000,000; and the five Bay " ships by two-thirds, about £4,000,000. " Putting the officially-estimated capi- " tal value of the fleet at between "£12,000,000 and £13.000,000, the " amount to be struck off this is about " £8,000,000." With the loss on the wooden ships in which the Government invested, amounting roughly at the end of last financial year to 6ome £2,330,000, "any business man would say that " the Federal having gone "into the steamship trading business, has incurred about ten and a-half mil- ;; lions of actual dead loss, and has now " on its hands some four million " pounds' worth of ships, some of them j " fit only for the scrap heap.'' 'lf any I advocate of a State shipping service for New Zealand can see anything in these facts to support his opinions, he must be an indomitable and muddle-headed optimist. The future of the Commonwealth Line is at present in doubt, but the Country Party in the Federal House is urging that a Royal Commission shall investigate"its affairs, and there is a strong demand that political interference must cease. In the meantime the belief is strongly held by those most closely connected with the enterprise, that when the genoral manager of the line arrives in Australia from London, lie will be given complete control of the line for twelve months, and will have io show in that time that it can be carried on under present trade conditions to the benefit of Australia. If he fails, the extinction of the lino

as a Government undertaking seems probable. . But whatever happens, Australia must face the certainty of huge losses. The Wool Market A doubt was expressed in cur commercial columns the other day as to whethe:the definite easing of prices at the wool sale in Wellington last week would extend to the fourth. Christchurch sale, which took place yesterday. This was doe to the fact that the >"orth Island- wool is generally of a coarser grade than the bulk of the Canterbury wool offered for sale at tfiis end of t-h-i season. Naturally, aiao, at this period, the condition of North Island wool ia affected more detrimentally than in this province by the state or the pasture. As events proved, prices at yesterday's sale for high--quality wools were maintained at practically the level of the preceding sale. For this the competition of ths lecai mills and of Horn* buyers was solely responsible. As was the case in Wellington last Friday, compared -with the January sale the American demand was almost negligible, but too much importance should not be attached to this circumstance, as the American wool manufacturing industry scarcely knows where it stands, on account of the uncertainty that exists regarding the permanence of the present tariff. Continental buyers operated with a fair degree of freedom for the coarser jvoola required in Europe, but on a lower basts thaji in January, though in. numerous instances prices showed an. improvement on those realised in Wellington. The decline in medium and inferior wools was a cause of disappointment, but it must be rememtered that the advance since the beginning of the season has been remarkably rapid, and a slight set-back was always a possibility. On the whole, however, the wool season has been infinitely mora favourable than the most hopeful grower would have dared to anticipate six months ago. • In Canterbury it has relieved, to a very large extent, the financial stringency -which was so severely straining the resources of the pastoral industry, and has given a great number of wool-growers good reason for renewed confidence in the future.