GOVERNMENT AID

New Zealand Herald, Volume LXXI, Issue 21844, 5 July 1934, Page 11

GOVERNMENT AID

BRITISH SHIPPING TRAMP STEAMERS ONLY CONDITIONS EXPLAINED ADJUSTING TONNAGE SUPPLY AND DEMAND By Telegrnph—Press Association—Copyright (Received July 4, 5.5 p.m.) British Wireless RUGBY, July 3 An important statement regarding the position of the British mercantile marine was made by the President of the Board of Trade, Mr. Walter Runciman, in the House of Commons to-day. He said the fundamental difficulties, not only of British shipping, but of all shipping at present, were the reduction in seaborne trade since 1929, and the striking increase in the mercantile marines of the world since the war. Seaborne trade had fallen since 1929 by one-third and was less than in 1913. On the other hand, merchant shipping had increased by about 50 per cent since 1914. Cargoes were being carried on an unremunerative basis with disastrous results to shipowners. Very few British shipping companies were covering running expenses, and fewer still were able to necessary provision for replacing ships as they became out of date. This was not only the shipowners' problem, but concerned in particular ships' officers, engineers and seamen as well as the nation as a whole. Unfair Competition If this state of affairs was due to fair competition it might be held that the British mercantile marine ought to fight its own battles as in the past, without Government aid, but this was not the case, continued the Minister. The increase in the mercantile marines of somo other countries had been due, in a large part, to the stimulus of subsidies, and that financial help was still being given by many foreign countries. From the point of view of the British Mercantile Marine, competition created and maintained by Government subsidy could not be regarded as fair competition, and British ship owners were entitled to seek the help of their Government if they were not able successfully to defend themselves. The efforts of the British Government were primarily directed to increasing international trade, but the revival of world trade might be slow. By means of their conference arrangements they were able to a certain extent to protect themselves, although it might be necessary for special measures to be taken by the Government in particular trades. Limited Subsidy Proposal The position of coasting and near sea trades raised considerations somewhat different from those applying to oceangoing shipping, and no special measures in respect of these trades were proposed. The Government was prepared to ask the House for a grant for vessels carrying tramp cargoes under tramp conditions. the subsidy to be used for defensive purposes anil to cost no more than £2,000,000. This subsidy would be aimed at securing the abolition of foreign subsidies and the greater employment of British shipping and seafaring classes.

Such a defensive subsidy could be given only on condition that shipowners formulated a scheme satisfactory to the Government. That scheme must prevent, as far as possible, the subsidy being dissipated by domestic competition between British ships, and must ensure it being effectively directed to securing greater employment of British tramp shipping at the expense of foreign subsidised shipping. The subsidy would be given for one year only and within that period would be subject to withdrawal if the circumstances which led to its introduction were altered. Dominions' Co-operation Essential

Mr. Runciman said it must also be a condition thai shipowners press upon shipowners in other maritime countries the framing of proposals which would tend to adjust the supply of tonnage in the world to tho demand, and thus raise freight rates once more to a remunerative level. Tho Government would continue its efforts to secure international consideration of means to place shipping generally on an economic footing.

The task of preparing the ground for, and of formulating, such schemes must in tho first instance fall upon the shipowners of the chief maritime countries. In considering these problems it was essential to have the co-operation of tho Dominions and India. Tho Government, therefore, was informing the Dominions and India of the position as it saw it, and seeking their views as to possible lines of action.

Tho Government had been prepared to place at the disposal of tho shipping industry financial help on favourable terms for the scrapping of older British cargo tonnage and for providing a smaller quantity of up-to-date cargo tonnage, either by the construction of new, or the modernisation of existing, vessels. The object was to ensure a reduction of surplus ships and to maintain the standard of efficiency of the cargo fleets. Other Proposed Steps Discounted The scheme had not been favourably received by the shipowners, but tho Government was still prepared to cooperate in .his matter. Various suggestions had been put forward for tho assistance of British shipping by preservation of inter-Imperial trades; preferential treatment of British ships, or cargoes carried in British ships, in Empire ports; differential duties against foreign ships which had tho benefit of Government subsidies, etc. Those were all measures which had their own dangers, but they might have to be considered if tho proposals no\y outlined did not lessen tho menace to the British mercantile marine. In response to requests by mombers of the Opposition Mr. Baldwin agreed that the House should discuss tho subsidy proposals on supply. He explained that tho proposals still had to bo discussed with tho shipping trade and there could bo no legislation on the subject until the autumn.

POSITION IN FRANCE GRANT OF £2,000,000 PARIS, July 3 The Senate to-day passed the Mercantile Marine Bill, appropriating £2,000,000 for subsidies, proportionate to tonnage and speed, for commercial and deep sea fishing vessels.