THE WEST OF ENGLAND STEAMSHIP SERVICE.

Evening Post, Volume LXVIII, Issue 98, 22 October 1904, Page 2

THE WEST OF ENGLAND STEAMSHIP SERVICE.

WAS THERE FAVOURITISM? DEBATE IN THE HOUSE. An interesting debate took place in the House yesterday on the report of the Extension of Commerce Committee on the contract with the Federal S.S. Company for the West of England service. The terms of the report have already been published; the point of it was that in the opinion of the Committee the best tender was accepted, and that the service was carried out satisfactorily and to the undoubted benefit of the producers of the colony. Mr. Duthie moved to add to the report paragraphs setting out that the contract was entered into without reasonable publicity, and without due consideration of Public requirements, and that a service via Australia and Soutn African ports on the Homeward voyage, and via Australia on the outward voyage ia not in the best interests of the colony. In the course of a long attack on the service Mr. Duthie said tfnerewas a combination of companies controlling the despatch of vessels, freights, terms, and conditions ; and which allocated the freight among the various companies, the whole affair Toeing so strong that no individual effort could get oenind it. The importers and exporters of New Zealand were practically helpless, and had to obey the behests of the combination, and pay whatever rates were charged. The outward freights were even more arbitaary than the inward, and if the shippers went past the companies belonging to the combination they forfeited a year's rebates. As an instance, be would refer to the rates in London for outward cargo In 1895 they were 30s, and since then they had increased to 40s, the rates by measurement had increased from 40s to 60s, and freights by weight had advanced 2s 6d. The Department of Industries and Commerce plunged into this contract with very little knowledge of the surrounding circumstances, and admitted that they' gave no thought at all to the question of outward freigfit. No contract could be carried out without having cargo both ways, and to entp.r into a contract of this sort without considering the question of return freight showed ineptitude and lack of business perception to a degree that was scarcely credible. The position was that while the London freights were 1 parcelled out on the terms he had mentioned amongst certain companies, there was no combination extending to the West of England, and there was a loophole " for a newcomer to get inside the ring in connection with the New Zealand tradeThis, backed up by a Government contract, had proved of very great advantage to the Federal Company, in so far that, while the Company was the head centre of the Australian ring, by means of this contract they had been able to force themselves into the London ring, and to establish themselves as i.ew Zealand carriers. Tha government, however, should have secured lower freights for the colony. The only means in which the intarests of the colony could bo protected was through the Government • exercising its powers to get behind these monopolies. Again, in the working of the contract they found that it had practically become one with the South African contract. The same steamers went the round voyage. He thought that was the underlying intention all along, and he went on to trace in detail the connection between the Federal S.S. Company and the New Zealand and South African S.S. Company. Then they had to consider what advantage the colony had gained from the contract. As pointed out by our agents in South Africa, when vessels arrived at South African ports with produce from New Zealand they also, carried to the same place produce from 'Australia! and we were subsidising a line to the extent of £30.000 a year for carrying a larger quantity of produce from Australia than from this colony. Why we should be doing such a thing was difficult to understand. The same thing occurred in connection with the' West of England service; the advantage was entirely on the side of Australia, and the service could not possibly be in the interests of the exporters of New Zealand. Further, we had had to compete in' South Africa with meat from the Argentine carried by the same steamers, and in some cases at less rates. He thought the position called foi Government interference, and the reduction of rates ought to have been the first consideration; but under this contract there was no advantage to the colony, and the rates could not be reduced except by the companies themselves. Mr. Duthie then went on to complain of the short notice given by the advertisements calling for tenders, and said there was another peculiar feature about the affair. The Minister for Railways and the Premier were in ..uckland early in December, and Mr. Cox, the representative of Birt and Co., was in Auckland at the same time. He could not prove what took place between them, but on 14th December ,it was reported in London that the contract hud been settled and the terms arranged. The Minister for Railways :That is not true. Mr. Duthie said he knew it was true. He knew that a telegram was sent on the matter on 12th December. He had been informed of the matter by correspondents, who bore out his statement that it was public property in shipping circles on 14th December in London. On the 18th the Shaw-Savill Company entered into the service, the Tyser Company did the same. He urged that the direct service offered by the Shaw Savill Company was superior to the Federal Company's. What value, he asked, could the country attach to a service by way of South Africa and Australia, a long voyage through the tropics, against a direct service from New Zealand to the West of England ports. It was incredible that the Government should have made such a blunder. The Government had acted throughout in real or affected ignorance of the requirements and conuitions of the trade, and the matter called for very full explanation. The Minister for Railways (Sir Joseph Ward) pointed out that Mr. Duthie and those associated with him had every opportunity to call as many witnesses as they liked. They did not call a single witness. The representatives of one of the unsuccessful tendering companies had been furnishing them with a great deal of information, but they did not call him to give evidence. Why? Mr. Duthie : You said you would. Sir Joseph Ward : I said if I found it necessary I would gall the representatives of the shipping companies. He found that from his point of view there was no necessity to call them. Every document connected with the contract was placed before the Committee, they were available from the beginning to the end, members had the opportunity to call whatever evidence they liked, and the only information that came before the Committee from the channels which were moving the hon. gentleman proved to be wrong. Regarding the shipping combination, he was prepared to show from the official records that although the freights were raised in the Old Country it was done upon the representation of some of the merchants and shippers in this country, so as to equalise the West of England rates with the rates ruling to London. He telegraphed refusing to allow it to bo done, and the rates were reduced by 2s 6d &■ ton. He was as strongly opposed as any one to a shipping combination, and was prepared to do anything in his power to prevent combination to the injury of the people of the colony, and the evidence

showed that the West of England service had brought about an enormous saving to the shippers to those ports, and a reduction of freights between New Zealand and the Old Country such as they had never heard of before. He was unable to understand why an endeavour should be made to show that the service was a bad one. Everything showed that it ' was a good service. Up to date £1,230,000 worth of produce had found its way out of New Zealand by the South African and the West of England services. He was reminded by the Minister for Public Works that this very company brought about a reduction of rates by about one-half for horses and men carried from New Zealand to South Africa, and did it in competition with other companies. It meant a saving altogether of about s £200,000. As to the rumour of the contract being heard in London on 14th December, he pointed out that the service had been mentioned in the reports of the Industries and Commerce Department in 1902 and 1903, and those reports had been published broadcast all over the colony and Great Britain. He himself talked about it in Manchester and in New Zealand from end to end. He had never ceased talking about it, and he was not responsible for any rumour that might have got abroad. There was no arrangement of the sort made, either actual or implied, until they dealt with the tenders. As to the South African service, he said there were several lines of steamers trading from Australia to South Africa which did not come to New Zealand, and the only chance our producers had to trade with South Africa was to get a line trading out of <»r own ports. As to advertising for tenaers for the West of England service, not a single company asked for an extension of time, but if they had done so it would have been granted. Since the inauguration of the service the ,rates to West of England ports had been greatly reduced, and in addition the outward freight on the last shipment of iron for the New Zealand Government had been reduced by 10s a ton. If they went through the evidence they woald find that, shorn of suspicion and prejudice and anything in the shaptJ of innuendo and imputation, it was a good thing for the colony that the contract existed. In regard to the South African service they would find that fully a quarter of a million of money had been brought to the colony by its means, and the company had spent some £59,000 in the colony. Mr. Duthie, in answer to some remarks by Sir Joseph Ward, said there was no "channel" influencing him in his actions or moving him in this matter. He dealt with it solely as one of public interest. The only communication he had with any shipping company was to ask one of the companies the rate of speed of its steamers. He got a return, which the Minister disputed, and he withdrew it. Kir J. G. Ward accepted the statement. Mr. Buchanan said he had been fighting hard against the shipping companies trading from the colony for years past, and he and the few associated with him had brought about a. reduction in freights on wool. In the very first year they saved the settlers over a quarter of a million in freights on dairy produce and wool. As to the advertising of the tenders, he declared that some of it was done through the medium of comic papers, and only seven days was given to tenderers. The Minister : That is not correct. Mr. Buchanan said it was correct as far as London was concerned. He had never opposed a West of England service, but the real question was, whether the Shaw Savill offer, wrung from them at the point of tha bayonet, was not one best orter. He said distinctly it was by much the best. The average duration of the voyage for the present contractors was 71 days, while the average passage of the Shaw Savill direct boats was 48 days. That direct service was offered to the Government when tenders were called, and tne wrong tendei was accepted. The National Dairy Association, which was greatly interested in the matter, said the service did not and Would not meet with the support of shippers of dairy produce. If it had been a direct service, they said it would have met with a good deal of support. With regard to frozen meat, English importers preferred Londdn as a centre of distribution. Why, he did not know. As to the South African service; they deserved no credit for having reduced freights in some caees, for if they had not conceded the reduction they would have got no cargo, as it could have been sent by another line. Mr. Laurenson defended the action of the Government in regard to the contract. Mr. Millar contended that, no argument had been adduced against the Federal Company's being the best contract. As to the Shaw SaviH Company, the terms of their offer would have allowed them to employ any ship they liked, without any provision as to 'speed. The opposition displayed was merely the wail of a jealous and disappointed competitor. The Leader of the Opposition urged that evidence should have been called from the shipping companies doing business in the colony. The Federal Company had been doing business with the colony for several years past — from the time when our contingents were being sent to South Africa. Mr. Massey went on to say that he wanted to trace the connection between the Federal Company and the Government, and he quoted the following from an article which appeared in the Evening Post of 27th July -.—"Thus we find in the Pastoralists' Review of 16th ult. a series of advertisements, from winch we take the following: 'Birt and Co., Ltd., exporters, etc., shipping and insurance agents, head office, Sydney. New Zealand — Invercargill. Managing agents in Australia for the Federal Line of Australian steamers, Australia to London via Cape.' 'Birt and Co., Ltd., head office, Sydney; Ocean Beach Refrigerating Works, Invercaigill, N.Z., J. G. Ward and Co., managing agents. 1 'J. G. Ward and Co., exporters of all kinds of farm produce to London and Australia, etc., managing agents for Ocean Beach Freezing Works, Birt and Co., Ltd., proprietors; head office, Invercaigill; branches, Gore and Bluff. 1 " Sir Joseph Ward, in a personal explanation, said that it was perfectly wellknown in the South that for years before the Federal Company came to New Zealand his firm was agent for Birt and Co. He had never at any time agreed to his firm being interested as agents, directly or indirectly, in any Government contract. The firm had never had an interest in the Federal Company as agents in connection, with any Government contract. Neither his firm Hor himself had ever been interested, directly or indirectly, in a Government contract, at any time since he had been a member of Parliament. There was not a scintilla of suspicion to be attached to his firm or himself in connection with this matter. Mr. T. Mackenzie (Chairman of the Committee), in the course of hk reply said the evidence given to the Committee was conclusive that the tender of the Federal Company was the best submitted. Personally he regretted that the offer of the New Zealand Shipping Company had been withdrawn, for he believed the Department would have recommended the Minister to very carefully consider the advantages of that line as against the service offered by the Federal Company. If the present service was to be renewed, he did not think the Government would be justified in continuing it by the present route, via Australia and South Africa. There was not a tittle of evidence to show that there was anything improper in arranging fche contract. On division Mr. Duthie's amendment was lost by 41 to 19, and the report was ordered to lie on the table.

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