WHITE STAR LINE

New Zealand Herald, Volume LXX, Issue 21515, 12 June 1933, Page 9

WHITE STAR LINE

GEIEVANCE AIRED

AUSTRALIA'S TREATMENT "HARD BARGAIN" ALLEGED MR. BRUCE'S REJOINDER By Telegraph—Press Association—Copyright (Received June 11, 5.5 p.m.) LONDON', June 10 At tlio annual meeting of the White Star Line Mr. Canty, who presided, referred to the sale of Australian ships formerly purchased by the Aberdeen Commonwealth Line. He said that during the White Star's default the directors and voting trustees had endeavoured to arrange with the Australian Government for a new basis on which to deal with tlio unpaid balance. These efforts had proved abortive. The directors had learnt with dismay and disappointment that Australia had decided to realise its security under the debenture charges on the fleet. "I cannot give adequate expression to the feelings of the directors at the disastrous ending of the transaction," said the chairman, "but in their opinion you have been the victims of a very hard bargain. During the whole period of the White Star's ownership the vessels were operated under conditions which rendered it impossible to show a profit from which dividends could accrue.

"The Australian Government was well aware of this, yet it chose to exercise its strictly legal rights and enforce its security at very heavy loss to us. The directors are of the opinion that the Australian Government already had received full value for its ships, and it would have been barely an act of grace to cancel the remaining indebtedness. Representations in this connection have been made."

In replying to Mr. Cauty's speech the Australian' Minister in London, Mr. S. M. Bruce, said seven vessels were sold to the White Star Line for £1,900,000, which had cost £7,000,000 to build. When the White Star Lino got into difficulties in 1931 a moratorium was granted and no action was taken up to March, 1933, after every effort had been made to come to a working arrangement satisfactory to both parties. The only offer the White Star Lino made would have resulted in the payment of a sum less than the annual interest charge, thus the debt would not have been reduced and the asset on which it was secured would have been of progressively diminishing value. In the circumstances the Australian Government, as custodian of the rights and interests of the Australian people, had no alternative but to direct that the ships be sold. A cablegram from Canberra on March 16 stated: The Commonwealth steamers, including the. five Bay liners and the Fordsdale, of which repossession has been taken from the AYhite Star Line, have now been sold to a new British company now being formed £500,000 cash, which will be applied to the reduction of the outstanding liability. There will still be owing to the Commonwealth £614,872 on account of principal and about £47,000 in interest. The Prime Minister, Mr. J. A. Lyons, in making this announcement in the Houfi'e of Representatives said the price which the new company was paying represented the present market value of the vessels. The Government had already collected £'205,118 insurance on the wrecked Ferndale.