SUEZ CANAL

New Zealand Herald, Volume LXX, Issue 21553, 26 July 1933, Page 5

SUEZ CANAL

REPLY TO CRITICISM BOARD'S POLICY DEFENDED MARQUIS DE VOGUE ON TOLLS AND TRADE (Published by Arrangement.) The seventy-ninth annual general meeting of the Suez Canal Company was held on Monday, Juno 12, in Paris. The Marquis de Vogue, president of the company, presided, and, in the course of his address, said: —Now that it has reached two-thirds of its career, the Suez Canal Company has experienced, like all human enterprises, both good and bad fortunes, praise and criticism. Without letting itself become oppressed by adversity or intoxicated by praise, the company has remained true to its task and to itself, and has always endeavoured, by a just comprehension of its duties, to protect the interests of the shareholders whilo safeguarding tho interests of its clients. When the company began its career criticism, both virulent and loud, was directed against it. Similar criticism has recently been- made again under the spur of the economic crisis. In the very country where once upon a time it was declared that the company vould ruin its shareholders, the criticism is now in ado that tho company is unduly enriching them; and what adds to the piquancy of this comment is the fact that it is made at tho moment when a new reduction of our dividend brings tho total reduction during tho last three years up to 2G per cent. Tho formulated intention of M. Ferdinand de Lesseps %vas to give a universal character to his enterprise, and to this end he reserved blocks of capital for those countries for whom his work seemed to have the most interest. Tho English share, like that of France, was settled . as being Frs. 40,000,000. But the diatribes of the British Government had their effect on capitalists, and whereas France subscribed about 104,000,000 (that is, 52 per cent of the capital) and the other nations ' together provided some 6,000,000, England only contributed Fr5.42,500. It was only 20 years later that England realised what a mistake had been made, and, thanks to fate, was able to enjoy tho harvest of efforts which she had not been able to break down. Charges and Dividends From its origin, owing to tho way matters went and not by the will of its founder, the Suez Canal Company took on the character of a French undertaking, and this is sometimes cost up against it by people living across the Chauliel who arc not well informed as to the company's history. To let its clients benefit by the good fortune of tho company .was always intended. It is a fact that, during the last 50 years transit charges have been reduced pari pajjsu with increases iu dividends. Such reductions and increases have balanced themselves almost exactly, since tho total amount of transit charge reductions during tho period in question represents a sum of 1700 million gold francs, while tho total amount of dividends distributed annually, commencing from that for 1884, amounts to 1680 millions. Further, the company spontaneously gave up maintaining this parallel movement when, owing to the economic crisis, shipping found itself in a had situation;- and, in spite of the reduction of our dividends, two successive reductions in transit charges—2s centimes in 1930 and 65 centimes in 1931 —havo lowered by 15 per cent tho transit charges? Thus the company, after having shared its good fortunes with its clients, has shared tho bad fortuno of tho latter. Cutting through the isthmus of Suez was tho greatest enterprise ever attempted by private capital. The very difficulties which were likely to accrue from the size of tho undertaking and from its novelty, its certain risks — which wore mado all tho greater by bitter opposition—the various incidents which could not be avoided in its early days, all of theso helped to rouse tho defiance of minds which were inimical to tho venture. And one has to admire tho courage of tho self-willed, dogged subscribers; for not only did they face to tho bitter end tho risk, of some kind of check or other, but also, after tho first years bad passed, they placed back in the undertaking a part of their profits. Is it likely that such courage and such capital would have been forthcoming—and continued to bo forthcoming—had tho subscribers not possessed tho hope of a remuneration somewhat higher than tho dividends forthcoming from investments of a completely safe naturo? A substantial remuneration was therefore legitimate. Trado not Restricted by Tolls As for tho way our tariff affects tho price of merchandise, it is easy to prove by unchallengeable statistics -that it amounts to very littlo indeed. Thus, in 1932, a year when prices were particularly low, only on exceptional occasions did it make a difference of liioro than 3 cent. Any lowering of our charges, no matter * to what extent, would therefore havo no appreciable effects on prices; on the other hand, how gravely are prices harmed by customs charges and by the monetary warfare which exists at present! As foj- tho volume of traffic, this is ahio not affected by our tariff. If it be fcruo that, traffic from Europe to .Japan has fallen by a half, traffic from Japan to Europe is threo times as great as it was—thus it is clear that transit charges count for nothing. Further, tho Board of Trado announces that, from 1931 to 1932, English imports of uverv kind have diminished by 18.4 per cent, while those coining from countries beyond tho Suez.Canal diminished by only 3.8 per cent. During tho same period English exports decreased in tho aggregate by 6.6 per coijt, while exports for countries beyond the Suez Canal actually increased by 4.0 per 'cent. So whore is the adverse influence of our tariff? And what is loft after all tho noise which hud been made, except tho fact that transit'charges seem to hit more heavily, those countries whose currency lias fallen in value? In any case, tho Suez Canal Company is not responsible for such currency depreciation, and one cannot sco why the company should bo tho victim of such movements. In default of any valid reasoning, the only thing which can bo brought up against us—and tho notion has already been openly expressed—is that there is a now law which is more and moro taking the place of the traditional law of civilised people. And this new law? Rather should one call it a revived law —tho sort of law which, in tho history of mankind, has been called "tho right of kings" or "tho right of tho strongest " In the name of 1 do not know what sort of "modern morality," loyalty to tho given word, respect of others' property, everything which civilisation had conquered from barbarism would

seem to bo disappearing bit by bit in the general shipwreck of moral principles. And those who ought to be the guardians of civilisation's conquests aro tho very first to betray their trust. That such examples como from those in authority does not mako it any tho more-edifying. Be that as it may, tho Suez Company has a clear conscience, for it knows that it has loyally fulfilled its task and kept its promises within tho terms of its concession. The policy which tho company has followed lias always received—l have pleasure in repeating it—tho unanimous approval of our board, whose members are as one in the defence of your interests.