COMMERCIAL.

Press, Volume LXIX, Issue 20904, 11 July 1933, Page 14

COMMERCIAL.

IS (CONTINUED.) SUBSIDIES ON ; SHIPPING. | ! GRAVE CONDITION OF THEj INDUSTRY. I COLOSSAL STATE GRANTS. (fkou uj:: o-.v:.- <LOiir.Krf?u::uj:sT.; LONDON. June 1. In a report to be presented to the biennial congress of the International Chamber of Shipping in Vienna the British National Committee discusses the grave condition of the overseas carrying trade of the world. For more than 50 years preceding the war, it is stated, the accepted policy of all maritime nations was to leave to individual enterprise the provision, generally, of international transport services, with limited grants. Under that policy the needs of the world's international trade, throughout a period of vast developments and extensions in both commerce and shipping, were met and satisfied without imposing any burden on national exchequers. "Since the war," continues the report, "it has been the policy of some of the maritime nations, at the cost ot the State, to build and run ships under their own ilags to compete with and displace ships under other flags m international trade generally, and not merely to provide ships under their own Hag for the particular needs of the nation. Under that policy there has been brought into existence, at prodigious cost to national exchequers, a mass of shipping tonnage far in excess of traffic requirements. Tins aisproportion is so great, and has lasted for so long, as to render impossible the operation of the international freight market on an economic basu. Paralysed Shipping. "It has, moreover, in great measure, paralysed the shipbuilding and shipowning industries under all flags, bo long as«ehipbuilding and shipownmg under all flags are left to labour under conditions that make their economic continuance an impossibility, the future of international sea transport is in peril. . ~ "Those conditions are, in the mam, the creation of direct and indirect subsidies granted to national shipping, and to premiums granted to national shipbuilding, to enable national ships to be built and run on an uneconomic basis. There can be no return to sound conditions in the shipping industry, and the future of international sea transport can never be assured, so long as the uneconomic policy of Government subsidies continues." There was an increase of 58 per cent, between 1913 and 1931 in the tonnage employed in the world's international seaborne trade; but owing to the greater average speed of the vessels the increased carrying capacity was 75 per cent., while the trade to be carried was now only one-half of what it was in 1913. At the moment 52,000,000 tons of shipping were available, but there was employment for only about one-third of that tonnage. Even if the world trade had increased as from 1924 at the rate at which it increased from 1904- to 1913, the tonnage now needed would be only about 40,000,000 tons. State Subsidies. Some particulars of the State-aid granted by various countries are citea. The outlay of the Untied States Government upon ship construction and operation through the United States Shipping Board for 1910 to June 30, 1931, reached the colossal figure of 3,694,855,792 dollars, but 79,648,869 dollars was returned to the United States Treasury. The ship construction loan fund of the United States Shipping Board on December 31, 1932, reached the amount of nearly 154,000,000 dollars. Some of the interest rates have been as low as i per cent. In 1931 it was estimated that the amount guaranteed for 10year mail contracts was 282,426,400 dollars. In the French budget for 1931-32 a sum of 118,000,000 francs was granted for the subsidising, up to 60 per cent, of postal news mail service in the Far East, Australia, New Caledonia, the African coast and the Eastern Mediterranean. In addition, 49,645,000 francs were granted for the Brazil and Argentine service, and other subsidies were given. The German Government in 1932 guaranteed to the extent of 77.000,000 Beichsmarks, loans raised by German shipping companies with their banks against securities and interest of V., per cent, above the discount of the Reichsbank. In the plan of January 1, 1926, the Italian Government drew up a programme of contracts and subsidies amounting to 4,500,000,000 lire over a period of 21 years. The Japanese Government have for years granted subsidies to the shipping lines conveying mails. In 1931 these subsidies reached a total of 2,650,000 yen. Scrapping of Ships. It is pointed out, however, that by their scrapping and replacement policy, the steps taken by Germany, Italy, and Japan have resulted in the elimination from the mercantile marine of old vessels amounting to 3,200,000 tons, and in the reduction of. world tonnage by a million tons, or about 1.5 per cent. In the Netherlands, a law of July 23, 1932, permits the grant of financial aid in the form of credits for financial reconstruction, and to prevent the transfer of vessels to a foreign flag. The administration of these loans is entrusted to a limited liability company with a nominal capital of 5.000,000 florins, 52 per cent, of which is provided by the State. I The amounts guaranteed under i trade facilities acts by Britain to shipowners and shipbuilders was £34,888,137.