Hawke's Bay Herald. MONDAY, JULY 28, 1879. A SHIPPING MONOPOLY

Hawke's Bay Herald, Volume XXI, Issue 5445, 28 July 1879, Page 2

Hawke's Bay Herald. MONDAY, JULY 28, 1879. A SHIPPING MONOPOLY

In March hist Sir Julius Yogel addressed a lengthy letter to the Government on what lie considered the unsatisfactory performance of the contract entered into by the New Zealand Shipping Company for the conveyance of Government freight to the colony. This freight in great part consists of iron rails, and of course is dead weight. It appears that tho contract for this class of goods is 2 -is per ton. It would not pay the company to fill a ship at this rate, but when they can carry just sufficient to ballast the ship the terms are exceedingly favorable to them, as is proved by the fact that private firms can get dead- weight goods carried at 20s per ton, and that the Government made similar terms during an interval when there was no contract with any company. The company, according to the shewing of Sir Julius Yogel, will not find bottoms as required, but seek to ship the iron as it suits their own convenience, and ifc consequently took seven months to ship 12,000 tons of rails. Sir; Julius says : — " I again repeat the opinion, thab if I had been able to have : made independent arrangements, • I should have done so far more expeditionsly, and with greater saving to the colony, inasmuch as I have every reason to believe that I should have been able to secure ships at a less rate of freight than that paid to or through the New Zealand Shipping Company. The company nppear to me to use the Government cargo simply as a convenience, to be taken, left behind, or delayed, just as it suits them. Private shippers can make more favorable tei-nis, and can ensure punctual dispatch, because the company know that if they do not take such cargo by a certain ship they will probably lose it altogether, whereas Government cargo can be left behind or delayed without any such risk, as it must go by one of their other ships on whatever date they may fix fov sailing. The New Zealand shipping trade is, in fact, now virtually under one control : there is no competition, and no secret is made of the pressure that it is supposed can be exercised on me." In the last quoted sentence may no doubt be found the secret of much of the evident heat of Sir Julius. Whenever he sought to make the company adhere to what he considered the terms of their contract the subject of dispute was referred by the company to the Government, and by the time the, question was settled that settlement was useless for all practical purposes. The Agent-General ultimately passes from the particular to the general, and argues ably in favor of free competition for Government freight. He points out that, on tha establishment of the New Zealand •Shipping Company, the Government of which he was a member gave the company a monopoly of the carriage of emigrants, " with the avowed purpose of setting them up as a competing power with the firm whicli previously enjoyed the monopoly," but there was no exclusive contract for freight, and that " the company was warned that after its first difficulties were over it would have to run alone." He continues; — "I do not believe any

Country of eqtt^l importance .was ever So dominated by a. monopoly, as New Zealand is by this shipping arrangement. I am of. opinion that yearly contracts for einigrailtii : al'6 ,, UiinScessary, thougli they are* -not so/disastrous as "those for freight^-' I .. still -J% think, it would be better to engage emigrants as they are required, because if a monopoly is made by the carriage of emigrants, competition for freiglit can, /to' a , large extent) be pre"vented." "Sir JifliuS "state's '-liis" •• reason for the belie#j|kak conipetitio"ri ; be advantageoite t6*^ths edldiiy; ]ie says that if Jpi& "(jOvernnient "engaged ship by 'snlpTwpjliey required the same, several' highrJlj^s firms would eiUe'F the trade, and *&§ Wlohy . wqulcl reap eiidi'iiious'aavaitagfes r in l ! tlie saving of the high freiglits. which are current!, this sbatement||eing founded on 'co'nv munications ,j?OT^de ' to him by large shipping TiMfr;' : i ;"; j ..;,; ;,,..,';,!„,/ j Incidentally -j^gir. Julius" shows his warm .appi'ovaj^-of? .'Mr- • Maoaifd^w's proposal - : 'fd?;''!*' direct 'steani' service^ between the co'tony and -England,' T and he argues th4tiiiid,g'i.Vihg,of-a contract to one company.. 1 * has a tendency, to pre^ vent such, a sfefrvice. " Hte/'ar'giVo^^i^favor of steamers as opiidsed to sailing^ Vessel^ and says :— " I belieye tiiat'if X had the P9>yer. .of engaging vessel by, vessel, I could arrange for the occa-! sional despatch of steamers without extra' cliargef to the Governnie/ifc. - A, very largtf-T&ipper. td. NbaV informed meya Fd\v days since, that he! wAs Stire^^teamers could.be largelyemployed^, in the trade, but that the; Shipping .Companies most strenuously, discourage -'their, use." ! This view -of; the subitqtr is "a somewhat ' ( novd| r o ne, but . it be admitted ; fit^afcj,it is: worth.3i.oJE consideration, nt *h>j<; ■ Mnpoitt, in his i'eply to^Sir 1 Julius Togol'slGtter;, admits the force of the reasons adduced, and intiuiates that a strict inquiry iiito til^ charges brought* A^aihst; the company by Sir Julius woiild : be instituted. He, however, does not consider that the Government would be justitied in cancelling the present idohti'act, but thinks, that in the event of another contract being entered, into in the future some provision should be made to enable the A gent- General; to Gh^.rtej.' vesselat; $&£ such exceptional' services as the .conveyance .of large: quantities dlMff ilw&y . materidl. Ke! does hot agr'be 1 tllat free competition for! separate freiglits would be advantageous! to the colony, because, he argues, "if; •there is no contract with sonic shippingeompaiWj tlid Ageiit-General would: nave very onerous duties on him, and his staff would have to be very materially increaued, and I dp riot' know if this, increase of . cost wotild. be productive of Very much benefit to the. iolohy,'' ;

There is one consideration which Sir Julius Yogel appears to have overlooked,., and that is that a very large, proportion of the shares in the NewZealand Shipping Company are held in the colony> and the mCliey paid jfor freight is in great part returned for expenditure in the colony. The company also keep up a number of agencies in the chief seaport towns, each of which causes the circulation of more money than would be the case if the trade were in the hands of foreign companies. It is well that we should, as far as possible, keep the carrying trade of the colony in our own hands.