INEVITABLE FAILURE

Evening Post, Volume CVI, Issue 104, 30 October 1923, Page 15

INEVITABLE FAILURE

STATE-OWNED SHIPPING

FUTURE OF .THE COMMONWEALTH LINE.

(FROM ODB OWN COIIRHSPONDENT.)

LONDON, 7th September, ft seems a strange thing (writes the shipping correspondent of "The Financial limes ) that anybody outside the ranks of bureaucratism should have a good W« 1° *? y for State-owned shipping after disastrous failure recorded during the past few years, but apparently tins idea has still many ardent adherents. In New Zealand, for instance, * n IDers are clamouring for a line of Government-owned steamers, and the" movement in India is still being pushed for all it is worth. Qn this side it is claimed that the depression in the existing State shipping is not due to State ownership, but merely part of the general slump that has overtaken shipping eince the war ended, and the depreciation in the value, of ships owned by private shipping companies is cited in support of this theory. After all is said and done, the true test of capability is in the facing of adversity m business the same as in anything else, and the managers of Stat'eowned shipping all over the world have been very badly handled by the competitive methods engendered by the difficuft times. Or to put it another wav, while even amateurs, dilettanti, ordinary Civil servants theorisers, and the common and garden bureaucrats could run a State undertaking while the general market favoured high rates and competition was artificially restricted, it takes very experienced men to 'bring- an faldustry through a trying period such as has baen in evidence during the past two or three years. " • ■

State-owned shipping has in the past been a failure, and it always will be a fa_ilure. The three outstanding instances of recent years—namely, the United States, Canada, and-Australia—ought to be enough to convince anybody of that, but apparently the idea still sounds feasible to some people. The United States Cj'^rnraent has now something like 10,000,000 tons and more of useless shipping on its hands, and the only thing Jo do with it is to send it to the break-ing-up yards. The big shipbuilding campaign that was undertaken in the States m the latter part of tKe war and after, that was designed to put America at the head of the world's shipping powers, has been a ghastly failure, and the only thing to do now is* to break up the ships in order to cut the losses. THE COMMONWEALTH LINE. The passing of Mr. Hughes from office m Australia has made a change in the shipping programme possible. An Act has been passed by both the Australian Houses of Parliament which has allowed of the transfer of the management of the Commonwealth Line to a board of directors, and the name is changed to the Australian Commonwealth Line. The Australian Government from now on will only figure as debenture holders, and there is .nothing to take exception to in that. It is difficult to estimate the losses made on the Australian shipping venture, but if the tonnage, is written.; Spwii; to the present-day .market value it would run into .many. :millions. In the past, of course, some: .very handsome proßts were made, and under efficient management there is no earthly reason why the ex-Government steamers should not do as well and hold their own" with the other shipping companies working m the Australian and allied trade.

Now that the Hughes fleet has been finally divorced from political influences and the Australian Government stands only as debenture holders, the way" is paved for a movement towards private ownership. The new management will have no working capita], and will still have to look to its debenture holders for money to carry on with; thus, of course, it is only a matter of. time before all the shipping in the Australian trade will be under complete private ownership. Either the Australian Commonwealth Line of steamers will become strong enough to absorb some of the older shipping undertakings or come to a working agreement with them, or the outside shipping concerns will gradually assume control -..of the ex-Government vessels. A lot depends on how the freight markets move during the next few years, and, how far competition will be carried if it comes to a fight for supremacy.