PACIFIC TRADE

Manawatu Standard, Volume IV, Issue 210, 6 August 1931, Page 9

PACIFIC TRADE

UNITED STATES BID FOR SUPREMACY. ( NEW ZEALAND’S INTERESTS JEOPARDISED. Like most civilised, countries, New Zealand is greatly concerned at present with the maintenance and the possible extension of its overseas trade. New Zealand is, therefore, interested in the action of United States shipping interests in establishing a new shipping line between Australia and New Zealand and United States ports, making a bold bid for control of the Pacific passenger and cargo trade (says the Christchurch Press). Tins attempt could be looked upon with a certain amount of equanimity by New Zealanders and those interested in the

Dominions’ trade if the conditions under which the competition for Pacific : trade is _ to be conducted approximated to" the "fail- field and no favour” conditions under which Britain has developed and maintained her ocean trade. When competitors like I the- United States shipping interests | enter upon the field of competition I backed by State assistance in the shape of special financial facilities, Government subsidies and other djrect and indirect assistance from the State, the matter becomes one of national importance. Without similar State assistance, the shipping interests of New Zealand may not be able to compete successfully. It is- even suggested that New Zealand will be ousted completely from the trade with the United States and its Pacific possessions unless some effective means- are devised to meet this State-supported competition. THE UNITED STATES OBJECTIVE. There is no mystery surrounding the principal object aimed at by the JonesWhite Act (under which the finance is provided for the extension of the shipping interests of the United States. It is to provide a strong mercantile fleet, which, in time of wan, will, act as an auxiliary for the United States Navy. The Jones-White, Act became law in 1928, and between then and June 30th, 1930, the operations under it may be thus summarised:— Shipping companies to _ whom loans have been authorised ... 22 New vessels built 49 Vessels converted 13 Total amount involved £22,800,000 In January, 1931, according to Syren and Shipping, the United States Postal Department announced: Routes in respect of which contracts have been concluded -for the fiscal year 40

Cost involved £4,200,000 Ships to be built “0 Gross tonnage 700,000 Spread over ten years these vessels will cost £55,000,000 In addition, tho cost of remodelling vessels will be £3,000,000 Gross toftnage of remodelled vessels .... 200,000

These figures, perhaps, are not large when the object in view is considered, but the authority quoted considers them so eloquent in themselves as not to call for any particular comment, except, perhaps, to enquire how long the United States taxpayer will be able to keep it- up. That question, it is hardly necessary to remark, takes on additional significance in view of the big problem of unemployment that the United States is confronted with at present, in addition to the unsatisfactory trade conditions generally. lIOW NEW ZEALAND IS AFFECTED.

New Zealand is about to experience the effect of the operations of the Jones-Wliite Act as the outcome of the recent inauguration of another shipping line between the Dominion and the United States. Already politicians are enquiring into the situation, the commercial world is alive to its' potentialities, and labom; circles have become concerned regarding the 1500 men and their dependants whose jobs and, sustenance are threatened. The loans granted under the Jones-White Act to United States shipowners bear interest at the rate of 3 per cent., a rate much lower than tho ruling rate. Tho subsidies ! granted are calculated on a basis of tonnago and speed, and, in the case of new steamers now' being built for New Zealand and Australian trade, the subsidy will bo at the rate of £2 per nautical mile for the outward passage from the United States. It is estimated that the direct assistance from the States will be:

Another • important factor is that, under the laws of the United States, foreign-owned vessels are debarred from carrying cargo frofn one .port in the United States or its possessions to another port _ in the United States and its possessions. A big proportion of the Pacific trade is between Hawaii and the United States; in fact, some authorities estimate that this trade alone is so valuable that United States vessels almost could afford to carry Australian and New Zealand passengers and cargo for next to nothing. That money, especially money pro-

vided by the United States Treasury, is no object is borne out by the statement that the line which has inaugurated tho competing passenger service also in running a cargo service from San Francisco and Los Angeles to New Zealand, and is receiving a subsidy amounting to £35,000 per annum. THE OUTLOOK.

All these facts point to one conclusion—that New Zealand-owned vessels will have little chance of successfully meeting such competition. There is no proposal to reduce fares; but, human nature being wbnt it is, the likolihood is that the palatiallyappointed vessels of the new line will attract the larger proportion ot the traffic. There is understood to exist in the United States Congress some difference of opinion as to the expediency of continuing the policy of the Jones-White Act; but the majority appear to be determined to adhere to that policy. The outlook, therefore, is far from bright from the New Zealand standpoint, and it appears that it will bo only a question of. time when New Zealandowned vessels engaged in the trade will be laid up, the men engaged in them thrown out of work, and thousands of pounds now spent in the Dominion for stores, repairs, and i suck-like, diverted to tho United States. Bound up in tho whole matter is the question of the future supply of British sailors, and New Zealand’s contribution to that supply. With the experiences of the Great | War still comparatively fresh in the 1 public mind, that phase ol the subject cannot be ignored altogether. RECIPROCAL TRADE.

The present state of trade between New Zealand and rtie United States provides little or no excuse for the establishment of the new line. 'lhe latest figures in the New Zealand Year Book refer to 1929, and show: £ Imports for U.S.A 9,073,268 Exports to U.S.A 3,603,427 Balance in favour of U.S.A. ■ 5,419,841 One reason for the Dominion’s exports to the U.S.A. remaining at a comparatively low figure is tho duties imposed on most of tho Dominion s products. The following, from the United States Tariff, July, 1930, gives an indication how tho -Dominion s trade is handicapped:— -\Vool—Greasy, 24c. per lb.. of clean content; scoured, 27c per lb. of clean content; on skin, 22c. per lb. of clean content. Duties remitted if used for manufacture of carpets and some minor itoms.

Higher rates for finer wools. Meat—Beef, 6c lb., but not less than 20 per cent, ad valorem; mutton, 5e Id. ; lamb, 7c lb. Butter—l4c lb. Chees-o—7c lb., but not less than 35 per cent, ad valorem. Tallow—sc. lb. Hides—lo per cent, ad valorem. Skins—Calf 10 per cent. ad valorem; rabbit, free; sheop, free (but duty as above on wool on skins). Sausage Casings—Free. Kauri Gum—Free. Phormiuin Fibre—Free. Apples.—2sc per bushel of 501 b. (New Zealand case holds 401 b). That some action is urgently called for is recognised by politicians, business men, labour leaders, and by those interested in the maintenance of the Dominion’s shipping trade, and the indications are that a strenuous attempt will be made to meet the situation that has arisen.

Subsidy, per annum £260,000 Savins in interest, per annum £60,0OU Total annual subsidy of about £325,000