THE SHIPPING SLUMP.

New Zealand Herald, Volume LVIII, Issue 17965, 15 December 1921, Page 7

THE SHIPPING SLUMP.

♦ —■ • ORIENT CHAIRMAN ANXIOUS.

GOVERNMENT COMPETITION.

Australian and N.Z. Cable Association. (Reed. 4.30 p.m.) LONDON. Dec. 13.

At the annual meeting of the' Orient Steam Navigation Company, Limited, Sir Kenneth ,Anderson, who presided, said that excluding mail steamers and the tonnage despatched to Australia in ballast, the cargo available during the past year represented no more than one-third to one-quarto of the carrying capacity of steamers placed upon berth. During the last few months the outward trade had ,gone from bad to worse. Reductions in freight had been made in order to facilitate business, but. no reductions in the power of shipowners to make would have a decisive effect until there was a general scaling down of all costs of production and handling.

The company's expulsion from the Australian coastal trade involved a very serious decline of revenue. The company was prepared to incur large expenditure to meet the additional requirements of the Australian .Navigation Act, but the labour conditions imposed would have either dislocated the domestic economy of the company's ships on the coast or put them out of business in the carriage of oversea business. "It was," said Sir Kenneth, " Hobson's choice for us." The running costs were still mora than double the pre-war figures. Failing a quite phenomenal development in traffic or an equally phenomenal economy in the cost of construction and running, it would be impossible for th* company to restore the fortnightly pre-war mail service without an extremely heavy subsidy. Personally, he doubted whether, from the point of view either of.Australia or Britain, the game was' worth the candle. ,

" Regarding the monthly service to be inaugurated by the Commonwealth Government lines," said Sir Kenneth, "we are assured that there is no intention to damage the shipping interests, but the blow will be none the less severe because it is not intended. Even if it eventually does not result in driving British shipping interests out of the Australian trade, it must immediately and inevitably act as a strong deterrent to their development. Capital and effort will not be as

-rear\ to adventure themselves where success or failure rests upon the incalculable attitude of a competitor dictated by political considerations, with a public purse to pay its losses and able to invoke the powers of Government to penalise shipowners and secure for itself an artificial preference. Already there are disturbing evidonces of such tendencies manifesting themselves." I

A COMPANY'S FAILURE. ENTIRE CAPITAL LOST. Times. LONDON, Dec. 13„ A. striking example of the Slump in the shipping boom is furnished by the position of the Stella Shipping Company, of Cardiff, which proposes to liquidate voluntarily, bocauso its entire capital has disappeared. The company owned four steamers, valued at £400,000. These were mortgaged for half that amount in to buy a new steamer, the,contract price of which was £170,000, of which £102,000 was paid down. By tho time the ship was completed higher wages and prices of materials mado the price of tho vessel £210,000, whereas her market value was only £70,000, and the_ value of the whole fleet less than tho mortgage. The bank accordingly foreclosed.