The farmer’s own shipping company

Press, 27 August 1977, Page 15

The farmer’s own shipping company

Number one in a series about the sea and shipping by ——-

Occasionally at Lyttel-* ton — and other New Zealand ports — visiting merchant vessels fly, alongside the normal courtesy and house flags and ensign, a yellow flag surmounted by a large, blue “S.”

Shipping affiliates readily recognise it, but most laymen do not. This is the house flag of Gep. H. Scales, Ltd, a shipping company with a difference, and sometimes called the “Farmers Shipping Company.” Its shareholders consist almost entirely of New Zealand farmers. With a low-key approach, Scales today charters ships and is one of the most successful groups in this country.

Recently the company bought a third share in a Hong Kong-based shipping line, Sofrana Far East Lines, linking New Zealand with South-East Asia, the Philippines, Hong Kong, and Taiwan.-

The head office of Scales is in Wellington, and there is a branch in London. Today the South Island is strongly in the picture with a lively branch in Christchurch, opened on May 1, 1974. Lyttelton also has a subbranch. Scales is going ahead by leaps and bounds, and the increasing list of major shipping agencies it holds is a formidable one. But charter-* ing ships was, and still is, Scales’s “bread and butter.” The emphasis has been on "wool export cargoes. At Wellington on July 22, 1912, Geo. H. Scales, Ltd, was first registered as a company, with a nominal capital of £30,000 divided into 15,000 ordinary shares and 15,000 preference shares. The picture today is vastly different. The company’s recipe for success is perhaps simple and old fashioned. It is an object lesson in the fruits of staff loyalty, persistence, and imagination, plus the company’s ability to trust its key men to make important “on the spot” decisions. What a pity more great shipping and other enterprises were not so endowed. One does not have to

look further than Scales’s Christchurch branch for a good example of this policy. This branch is managed by Captain R. Fast, In the book; “Fair Winds and Rough Seas,” by the late Allan Kirk, he is described by Captain J. E, Holm: “Captain Ross Fast was one of those remarkable men who inspired complete confidence in his ability to handle any job given him. even if not strictly in his department. He was Holm and Company’s wharf and marine superintendent for the South Island, based on Lyttelton. He relieved masters at sea at short notice wherever required, and his tactful and capable handling of many situations, industrial and otherwise, was of untold value.”

While the farmers’ company has progressed some shipping lines have disappeared or seriously declined. This season alone, through various agencies held by Scales, more than 400,000 bales of wool has been shipped overseas.

But strange indeed was the beginning of Geo. H. Scales, Ltd.

Late last century shippers of wool and other exports were becoming concerned about the high rates charged for freighting cargo from New Zealand overseas. Producer boards were non-existent then as we know them today, so that freight-rate negotiations were all but impossible.

Two prominent New Zealand sheepfarmers of that era, W. C. Buchanan and H. G. Williams, who were large shippers of wool, met, in Wellington early in 1897, W. G, Foster, who was then manager of the Assets Realisation Board. Later Foster was manager of the Wellington Meat Export Company, Ltd. This trio, and a fourth member, E. J. Riddiford, another prominent fanner, initiated the Freight Reduction Movement and formed a provisional committee. This was the first foot in the door to obtain freighting rates as favourable as those enjoyed by Australia’s sheepfarmers. The newly formed committee then sent circulars to prominent New Zealand farmers from North Cape to Bluff. At this period, the “Big

Three” the New Zealand Shipping Company, Ltd, (including its affiliate, the Shire Line), Shaw Savill and Albion, Ltd, and the Tyser Line — by appointing and paying agents had a stranglehold on New Zealand's wool clip. These companies did a good job, but both they and their agents showed immediate antagonism towards the newly-formed Freight Reduction Committee.

The Freight Reduction movement gathered momentum over the years, and pressure was brought to bear to reduce freight rates from New Zealand. George Scales was honorary secretary of the committee. Surprisingly, and within 10 days of the committee’s formation, the shipping companies announced a reduction in wool and mutton freight. At the time of the committee’s formation, it was sometimes cheaper to ship wool to Australia, and thence to Britain, instead of direct from New Zealand. By using sailing ships, Scales later found it could keep freight rates down, just as the Freight Reduction Committee had found. Wool could then be shipped direct. After all, business is competitive — some survive and some go by the wayside. There is one classic New Zealand example of failure by a group of sheepfarmers in Poverty Bay. They bought and renovated a British cargo steamer, the Admiral Codrington, to oppose the established shipping companies and undercut their freight rates. The Admiral Codrington was an ill-fated venture. The Poverty Bay sheepfarmers lost heavily. As children in Gisborne we used to refer to the Admiral Codrington as the “Codlin Moth." But so much for that unhappy, venture. Scales was destined to succeed. New Zealand wide, sheepfarmers gave solid support to the company. In addition to being canvassed by mail, many received personal calls from the indefatigable George Scales, whose “charter” house flag flies today in New Zealand seaports. In earlier days, local newspapers were by no means kind to the Freight Reduction Committee, and

they vented their spleen on Geo. H. Scales, Ltd, when it came into being. Ultimately, the Freight Reduction Committee entered an agreement with a Dunedin-based shipping company, J. H. Stanley and Company, Ltd, which promised to supply the committee with tonnage as required. It was a marriage of convenience. It surved its purpose for a period, but more and more authority was gradually being invested in George Scales, who ultimately took on himself the whole responsibility of a shipping venture. Scales received no financial backing from the Freight Reduction Committee, although he 'yas practically its leading light until he branched out on his own.

Obviously Scales was a man of imagination, integrity, and activitiy. He made several trips overseas soliciting business. It was inevitable that the Freight Reduction Committee should disappear gradually as the firm of George H. Scales, Ltd, came into being.

George Scales was a glutton for work. He was chairman of directors and also managing director of his company from 1912 to 1922. Other directors were W. H. Beetham, R. R. Beetham, H. McL Campbell, G. V. Pearce. E. V. Riddiford, and H. G. Williams.

The board had its first meeting on July 31, 1912, at Wellington. In those days there were no directors’ fees. All were members of a cause which today speaks for itself as one of New Zealand's most fruitful ventures. Today’s chairman of directors is Mr C. H. Bethell, of Christchurch, a retired sheepfarmer.

On one of his visits to Britain, after the company was firmly entrenched as a shipper, George Scales arranged for Lawther Latta and Company, Ltd, shipbrokers and managers of the Nitrate Producers Co., Ltd, which ran steamers, to be his London agent. This was another step forward. At the beginning of the 1915-1916 season, a wartime measure was the commandeering of the New Zealand wool clip and the establishment of a Shipping Board to control and allocate British merchant shipping tonnage to

essential war-related trading. This could have made things harder for Scales, but the company was used to weathering storms and even hostility. George Scales, who was also a commission agent and dealt in marine assurance, land, and livestock, had his hands full, but survived.

He was farseeing, too, Although the company chartered many sailing vessels and, by natural evolution, steamers, the time was coming when he wanted to own his own ships. When he became an agent of the Westport Stockport Coal Company, Ltd, he looked for a suitable coal hulk to buy, but changed his mind and bought three small seagoing sailing vessels. At last he was in the shipowning business. They were the barquentine Ysabel (149 tons gross), and the barques Rona (678 tons gross) and Louisa Craig, which was renamed Raupo. They were engaged in the Pacific trade. By 1916 Geo. H. Scales, Ltd, was well established as a shipowner. For the next two years and a half the company traded profitably. A small scow, the Kereru, which was renamed Erira, was added. This quartet was engaged in the Pacific trade and sailed under the auspices of Geo. H. Scales (Pacific), Ltd. In 1920, the barque Alice A. Leigh (2999 tons gross) was bought and named Rewa.

Interestingly enough, a former Lyttelton harbourmaster (Captain A. R. Champion) who is a member of the Lyttelton Harbour Board, made his first voyage to sea aboard the small barque Rona, in 1916, at the age of 14. As for the barque Rewa — she carried one of the last wool cargoes to leave New Zealand by sailing vessel. While wool was the company’s main business there was little time for “wool gathering.” Gradually, the company of Geo. H. Scales (Pacific), Ltd, merged with and was absorbed by Geo. H. Scales, Ltd. In April, 1923, a decision was made to increase the company’s nominal capital. This was a prosperous year for the woolgrower, and as a result of more canvassing and circularising, a large number of sheepfarmers

became shareholders. In that year three steamers, the Erroll, Calonne, and Svarten, were chartered to carry the company’s considerable quota of the woool clip.

While on yet another visit to London, Mr George Scales, after several conferences with the established shipping companies, reached an agreement that Scales would restrict its wool bale loading to 55,000 bales per season. Obviously the shipping companies were beginning to feel the impact of Scales’s wool freighting efforts; but Scales and the established shipping companies were able to agree amicably on the rate of freight. In 1948, while homeward bound to New Zealand via San Francisco. Mr George Scales suffered a heart attack. Shortly afterwards he died in Wellington. The war years had taken a toll on him. During World War II he had to approach by letter the then Minister of Marketing (Walter Nash). Because Scales owned no actual ships of its own at that time, the British Ministry of Shipping did not regard Scales as a shipping line in its own right. Mr Nash immediately showed interest in the company’s predicament, and also surprise that Scales had shipped so much wool overseas without its own ships. As a result, he cabled New Zealand’s High Commissioner in London, and the matter was soon solved to Scales’s advantage. In fact. Scales shipped 60,000 bales of wool overseas that season.

In the early days, Scales sometimes freighted wool by Clan Line and Ben Line steamers. The Bencruachan had 22 loadings under Scales’ house flag. Today Scales stands on its own merits. It is 81 years since the Freight Reduction Committee met first. It is truly a shipping company, even without ships, and indeed, is one of the most successful and n’o»ressive business concerns in New Zealand.

It has shipped cargo by sailing vessels and steamers, and ioday it meets th* challenge of new dimensions in the form of container vessels, bulk carriers, tankers, and rollon vessels.