GIANT CUNARDER

Evening Star, Issue 21036, 25 February 1932, Page 16

GIANT CUNARDER

COULD BE MADE TO PAY COMPANY'S REVELATIONS An extraordinary revelation of the | financial affairs of the Cunard Company has been made in a special circular issued to shareholders regarding the suspension of tho work on the now mammoth liner, tho construction of which, it is stated, could be completed if the Government would grant reasonable help by way of a loan. It is recalled that in past enterprises the company received special treatment in the matter of finance, notably in tho building of the Lusitania and the Mauretania, for which tho Gpvernment granted a loan repayable in instalments. The company is convinced that, once Iho now liner has been built, she can he made to pay her way, despite what the I’rinio Minister, Mr Ramsay MacDonald, recently slated to the contrary. On this point the directors are explicit, as is indicated by tho following quotations from tho circular:— “ Your directors are firmly convinced that she is the right ship to build as well in the interests of the company as of the nation. They have never lost faith in the company’s ability to operate her, either with the existing ships or later with a future sister ship, in such a manner as will enable her to pay her way; and if opportunity is afforded, they will lay before the Government the facts upon which the company’s schemes are based. Once such ships as this become possible they become inevitable, and as a matter of history in the North Atlantic it has been proved over and over again that it is the finest ship in the trade that gets the traffic, not only for its company but for its country. _ln other words, tho fundamental basis of No. 534—the present official name of the now liner—is purely economic.” The circular adds that the first of the new ships should be in service by 1934, unless the company makes a definite surrender of its paramount position and risks the transfer of English mails to foreign and faster ships. For some time after 1934 it would bo possible to maintain the transatlantic mail service effectively by “ No. 534 ” and the existing tonnage, but, when the next replacement was due, the second ship would have to bo of the same type, thus making it possible for two vessels to do the work of tho three existing Empress liners. The directors are emphatic that in no circumstances would they consider building any other class of vessel, for to do so would be to engage in a losing hazard. COMPANY’S OBLIGATIONS. Some idea of the immense financial obligations of the Cunard Company is given by tho following interesting information, gleaned from the circular. During the post-war years, from 1919 to 1930, depreciation to the extent of £15,267,287 has been written off the company’s own ships. In the case of subsidiary companies figuring in the Cunard balance-sheet, depreciation has been dealt with on similar lines. During the post-war years tho ship depreciation written off by the subsidiary companies has amounted to £16.133,000. During tho period specified the Cunard Company and its subsidiaries had paid over £6,000,000 in income tax. No receipts from tho return of excess profits duty have been brought into the profit and loss accounts of the Cunard Company or tho subsidiaries. The agreement under which the Lusitania and the Mauretania were. built terminated in 1927, when the last instalment was repaid with interest on tho date due. If the Government would extend similar assistance in respect of the new liner, work could proceed at an earlier date than would otherwise be possible. INTERNATIONAL CAUSES. That construction is suspended at present is not attributable to factors in■■flerent in the North Atlantic trade nor to factors domestic to the company, but to international causes which are hampering tho ordinary financial machinery of commerce, the circular adds. The keel of the new giant liner was laid in December, 1930. In the following year more than £1,500,000 was spent on construction, and work was begun on the ninth of the eleven decks. In addition to 3,000 workpeople directly employed, it is estimated that 10,000 were indirectly affected by the suspension of the construction work.