CANAL DUES

Manawatu Standard, Volume LV, Issue 158, 4 June 1935, Page 5

CANAL DUES

SUEZ AND PANAMA. PENALTY ON SUEZ SHIPPING. Writes H. G. W. Woodhead, C.8.E., in the Sydney Morning Herald : The Suez Canal was opened to commercial traffic in 1809. The duos authorised in tlie original concession were 10 francs per toii. British shipping circles regarded this charge as excessive, and eventually an agreement was reached under which, alter payment of a certain dividend, a proportion of the surplus should be allotted to a reduction of tolls, in 1906 the tines were 73 francs (for loaded vessels), in 1928 7 francs, and in 1934 the nominal rate was 6.65 gold francs, reduced as a temporary measure to 6 francs. A charge of 10 gold francs per passenger is also made. Half dues are charged on vessels in ballast. An application for an extension of the concession, which expires in 1968. was unanimously rejected by the Egyptian Legislature in 1909. The British Government, which had frowned upon the Suez Canal project in the early days, experienced a change of heart in 1875, when Disraeli purchased the then Khedive’s 176,602 shares for about £4,000,000. It thus acquired a seven-sixteenths interest, which'is to-day valued at £88,570,241, and, in the financial year, 1933-34, yielded dividends amounting to £4,655,000. The majority control, however, and the head office of the Canal Company, remain in France, 21 of the 32 administrators being French, 10 British, and one Dutch. The French Government has no direct financial’ interest in the canal. Of the British administrators, three only represent the Government, the other seven being representatives of commercial and shipping interests. During the Great War it became necessary for the British military authorities to take over the direction and protection of the canal, which was strongly fortified. A Turkish military column once reached the eastern bank, but was repelled and rounded up before it could do any serious damage.

[ One result of the war was the construction of the railway from Egypt to ■ Palestine, which involved the erection of a swing railway bridge at Kantara —-the only remaining visible sign of the British military occupation. Under the Anglo-Egyptian Treaty, however, Britain reserves to herself the military protection of the canal zone. Construction of the Panama Canal was far more difficult than that of tlio Suez waterway. Much of the excavation had to be done in solid Pock, and eight locks had to be made to enable ships in transit to be raised some 85 feet above sea-level en route. The Panama Canal is only half the length of the Suez Canal (50 miles compared with 100). It has, however, a mini-

mum depth of 41 feet, as compared with 33. The total cost of the enterprise, which was completed in 1914, was 366,650,000 dollars, and the total investment of the American Government to date has been about 544,000,000 dollars. The tolls were at first fixed at 1.20 dollars per ton for loaded ships, and 72 cents for vessels in ballast. They have since been reduced to one dollar and CO cents, respectively. In 1928 the tolls amounted to 27,176,045 dollars, and the expenses to 8.951,200 dollars. COMPARISON OF RETURNS.

The 1934 statistics of the Panama and the Suez canals have been published recently in the New York Maritime Registe*r and the Shipping World, respectively, and a comparison of the figures is illuminating. As the Panama returns are quoted in United States dollars, and the Suez figures in French francs, it is necessary to convert them to a common basis to appreciate their significance. This has been done at an exchange rate of 6.60 francs to the United States dollar, in the following table:—

From the above figures it would appear that the tolls levied by the Suez Canal administration average more than twice as much as those imposed for the passage of the Panama Canal. This disparity appears the more strik-

i ing when it is recalled that, though difficulties exist in keeping the Suez Canal free from sand-drift, the construction of the Panama Canal was a far more costly undertaking, and its operation requires the maintenance of eight locks, with elaborate machinery for opening and closing them, and for towing vessels through. .

Th®‘ Panama Canal is the property of the American Government, and there is, therefore, no question of the payment of any dividend to stockholders. The Suez Canal, on the other hand, is a commercial enterprise with a limited concessionary period. Even so, however, the dues levied by the latter appear excessive. The latest dividends have amounted to over 150 per cent, of the par value of the shares, and it is difficult to imagine any other monopolistic enterprise of such vital importance to the world’s shipping profiteering on such a scale without being the target of continuous and world-wide hostile criticism. The present tariff of the Suez Canal may not unfairly be characterised as a serious hindrance to trade, (t operates, also, to prevent the speeding-up of passenger and cargo vessels plying between Europe and the Far East or Australia and New Zealand.

The magnitude of the Suez Canal levy may best be appreciated by taking as an example an hypothetical passenger steamer, with a full complement of passengers, and carrying a general cargo of, say, 16,700 tons gross and 9450 tons net register. Her tonnage measurement for the Suez Canal would amount to approximately 10,500, on which she would be required to pay for a single passage 63,000 gold francs. Add to this a levy of 10 gold francs for 599 passengers, we get a total bill of 68.990 gold francs, or. at current exchange rates, approximately £4695. It does seem that in these days of universal depression, when the question of granting subsidies to shipping is receiving the attention of every maritime State, the Suez Canal might reasonably be expected to make some contribution towards relieving the burden on the shipping that uses that waterway. The Suez Canal would certainly remain a

very paying proposition if the tolls were reduced to the Panama Canal level (say ’4s instead of 6s 6d per ton on vessels in transit), with no capitation charge for passengers, and one might then expect a general reduction in freight rates, and an acceleration of

steamship services east of Suez. Unfortunately, as has been made plain above, while the British Government owns a seven-sixteenths, it does not hold a controlling interest. The French Governnient exercises no control whatever over the undertaking; and private investors, while the future of the enterprise remains uncertain, and the concession has only 33 years to run, may be reluctant to forgo immediate profits. The only means, apparently, Jiy which an early reduction in Suez tolls can be looked for is a mutually satisfactory agreement between the concessionaires and the Egyptian Government in regard to the future of the Canal on the expiration of the concession.

1934. 1’anama Canal. Suez C'atial. Receipts Fes. 374,631.000 F es. 860,700.000 ($24,358,323) ($56,000,000) No. of vessels in transit 5,342 5.663 Tonnage of vessels 29,790,590 31,800,000 Tonnage of cargo 25,900,152 28,400,000 Av. tolls per vessel Fes. 70.002 Fes. 151,984 ($4,553) ($9,882; '