THE SHIPPING COMBINE.

New Zealand Herald, Volume XXXIX, Issue 11986, 7 June 1902, Page 5 (Supplement)

THE SHIPPING COMBINE.

• A GREAT NATIONAL DANGER. [FROM OUR OWN CORRESI'OXDEN-T."] London, April 25. The British navy is really only one arm of blip maritime defence. The other, equally important and indispensable to our national, existence, is the mercantile marine. It 'was .only by being able to command the instant use of the finest steamers' flying the British flag" that we were able to perform the unparalleled feat— has been the theme of equally unparalleled Ministerial bragging—of conveying . those 500,000 troops to South Africa so safely and swiftly. It is only upon our merchantsteamships that we can depend for the daily-needed food of Britain's forty millions of population. For we grow less and less ! of that food in these islands themselves. If our food supply were cut off even for a week through the stoppage of our marine communications we must promptly be starved into unconditional surrender to any foe. Just at this critical juncture comes the disquieting news that a huge American shipping ring—or " combine,' as it is called, on the same principle that sanctions the odious vulgarism " invite" as a noun, meaning invitationhas virtually obtained command of the Atlantic shipping trade between Britain and America by absorbing into one vast quasi-syndicate the majority of the American and German and British steamers that perform the service. Hitherto the Cunard and Allan line have held aloof. But the other chief Transatlantic lines all have come into the mighty " combine." which has been engineered by Mr. Pierpont ■ Morgan. The combination appears to comprise all the other chief Atlantic shipping companies, with a total tonnage of'nearly a million, and'a capital of about forty millions. The tonnage is approximately as follows: —British, 289,406; American, 127,555; German. 516,073. The companies already included in the new " combine" are understood to be the following, whose fleets of freight and passenger ships number over 200, viz., White Star, Dominion, Leyland, Atlantic Trans-! port, American, Bed Star, North German Lloyd, and the -American lines. It should, however, be noted that the last two named companies have not yef consented to actual incorporation, but are in " complete accord." Various rumours have been current as to the intention of the - new " combine." It was stated yesterday that the Consolidated Steamship Company would probably be in operation under the new conditions in a few months: that the International Navigation Company would be made the parent company ; that it was intended in time to inaugurate a system of daily departures from New York ; that Liverpool would be abandoned as a passenger' port and Southampton substituted; and that every port would be developed along the lines for which each was best adapted. It is stated that live British companies (including the Cunard), with a fleet of nearly fifty ships, at present stand outside the combination. They are the Cunard, Allan, Anchor, Wilson, and Beaver. There is no change of existing management contemplated, according to the promoters, who say that each line will retain its own nationality and flag. Reduction of expenditure is looked for from the combined working, which in its turn will tend to reduce competition. The Times says authoritatively: — "Under the conditions of working hitherto each line has felt compelled to maintain its full service because its competitors did so, and the frequent spectacle has been afforded of two or more large and costly steamers making voyages to carry at a loss what one could readily have carried at a profit. Though all these steamers could be well and profitably employed when trade conditions are favourable the results are simply ruinous when they are rim under the conditions mentioned. It will thus be seen that one of three things must happen if the modern steamship development is to be maintained, and profits eventually made by all the companies. Either there mustbe (1) ruinous competition with incalculable losses for a time until some of the competing companies are swallowed up, or (2) an increase in rates, or (3) a reduction in the working expenses of the different companies. It is equally evident that the lastnamed was the most reasonable and busi-ness-like alternative, and it is also manifest that this could only be secured by the establishment of a community of interest among the various companies most directly concerned, and this is what has taken place." "It will be gratifying to the British public to be assured that this involves no change of flag and little or no change of management. The White Star line, for instance, with its connections to various parts of the world, will be worked on much the same lines as hitherto, and its shareholders will have a very large interest in the new combination. The Dominion Line shareholders will be in exactly the same position, and it will continue to maintain its services from Liverpool to Boston, Portland, and Montreal, and its Mediterranean trade, as at present. The Leyland Line comes into the combination retaining its identity as a British company, and the Atlantic Transport Line, the American Line, and Red Star Line also come into the combination, but do not contemplate any change in the flags under which their ships at present sail. It is obvious that no scheme for a combination or working arrangement between British and American interests would be complete that did not take intp account the two great German lines, which are in a position to make so strong a bid for the American trade. " A satisfactory agreement has been reached which, while absolutely maintaining their identity and nationality, secures a community of interest and harmonious working with them, while there is nothing in the project designed to prejudice companies who may be outside of the combination." In a later article tlje Times says:—"ln connection with the new Transatlantic steamship combination it is worthy to note that three of the White Star vesselsthe Oceanic, the Majestic, and the Teutonic — are included in the list of reserve merchant cruisers, for which.a subsidy of £63,000 is provided in Vote 8 of the Naval Estimates, 1902-1903 ; and that five others—the Britannic, the Germanic, the Gothic, the Cymric, and the Medic —are scheduled as being at the disposal of the Admiralty without further subsidy, should need arise for requisitioning them. In the event of the Cunard line's joining the combination eight other vessels over which the Admiralty have the right of pre-emption would be affected —the Campania, the Lucania, and the Umbria being directly subsidised as reserve merchant cruisers, and the Etruria, the Aurania, the Ivernia, the Saxonia, and a vessel in lieu of the Servia being held at the disposition ' of the Admiralty without further subsidy. The point raised in naval circles is whether this arrangement may not have to be modified when the western ocean traffic comes to be controlled from America." But it is impossible to be blind to the likelihood that things may be so worked that if any critical juncture should suddenly arise England might find it impracticable to obtain the command of the transport service absolutely essential to the nation's existence. Notwithstanding the optimistic view taken by the Times the matter is' regarded by the British Government and Parliament as sufficiently serious and formidable to call for the immediate appointment of a committee of inquiry -as to its possibilities and potentialities for mischief. New Zealand is, I need hardly say, most intimately concerned in the question. Not only are two of her regular traders, the Gothic and the Delphic, included in the huge fleet which will pass under the control of the new American ring, but also, in the event of war with a European Power, or with the United States of America, New Zealand's trade would be at the mercy of swift steamersthe swiftest in the world, e.g., the Deutschland. which will fly under the new control while the Imperial navy would have its work cut out to so seriously a large extent in protecting the marine commerce on which the absolute existence of Britain and of its Empire depends that the naval protection feasible to be afforded to the colonial coasts and ports would be diminished to the minimum possibile.