SUBSIDISED SHIPPING

Otago Daily Times, Issue 22100, 2 November 1933, Page 2

SUBSIDISED SHIPPING

AUSTRALIA AND NEW ZEALAND JOINT ACTION ADVOCATED In a recent issue the Melbourne Age dicusses editorially the effects which ensue from- the action of the United States Government in subsidising shipping companies so that they are enabled to intrude into the passenger and cargo trade of other countries. The results of this competition are examined and in the interests of the sea-borne commerce of Australia and New Zealand joint measures by which it may be combatted are earnestly advocated. It is as a rule tactful to avoid looking too closely into any_ friendly neighbour’s affairs (says the'Age) when at some point these appear to be in a state of disorder. But it is for Australian people to ignore entirely many of the statements made in the course of the inquiry being held by the United States Government into the question of shipping subsidies. It has been alleged that some shipping companies were able to make up their heavy losses out of their huge mail subsidies; that the subsidies were, in turn, privately taxed in order to provide funds for publicity campaigns demanding that the sidies be increased. Corruption, if it be proved, would seem to have been carried on by methods ingeniously interlocked. Australians are not called upon to estimate the value of the evidence submitted, but they have some right to bo interested, since the whole problem of the effect of subsidised foreign shipping upon Australia and the British , Empire is being urgently pressed as ripe for review and speedy action by both Imperial and dominions Governments.

The payment of shipping subsidies may be a perfectly legitimate item in the transactions of any nation. The £IIO,OOO paid annually by the Australian Government under the overseas mail contract, and the £6OOO payable in respect of Tasmania, are for services rendered, and are calculated on a businesslike basis. The term “ shipping subsidy ” in relation to the United States has a different connotation. For years past shipping companies in that country have been encouraged to intrude into foreign passenger and cargo trade with the aid of national financial support in the form of loans at nominal interest rates for the construction of ships, extravagant mail contract terms and subsidies on out-ward-bound mileage. By such means the United States has sought to strengthen her mercantile marine. Incidehtally also she has helped her ships to pillage, as far as that is permitted, the passenger and cargo trade of other countries.

In this aspect of her shipping policy the United States is alike inconsistent and unfair. She allows no intruder into her coastal trade; she prohibits all foreign ships from carrying a single passenger or an ounce of cargo between any of her ports. Two years after annexing Hawaii she included that island within her coast line, and embraced it in her shipping laws. These forbid the carriage of cargo or passengers between United States ports except in United States vessels. Australian ships are barred from any trade between the United States and the distant side of Hawaii, but some of the lavishly subsidised shipping interests of the United States are making increasing encroachments on the trade to Australia on this side. Australia prohibits no British or even foreign vessels from participating in her coastal trade. All she asks is that alien ships shall conform to the conditions she lays down for her own. Australian shipping companies arc under compulsion with respect to these conditions, and it would be irrational as well as iniquitously unjust, to.grant external competitors exemption.

The inter-Dominion trade, however, as between Australia and New Zealand, leaves a wide loophole open, and the United States subsidised shipping continues to make free use of it without thus far any effort to check it by the two Governments on whom rests the onus. It is a situation in which independent action is impossible; to be effective it must be joint, and it ought to be prompt. The recent statement on the matter by the Minister of Commerce does not make the issue clearer, or offer much hope of bringing nearer a satisfactory conclusion. If some friendly, equitable arrangement with the United States is in prospect, both the Australian people and the local shipping companies will continue to exercise patience. But if the prospect proves elusive, then steps should be taken to protect the nation’s shipping industry,, particularly against the flagrant attack that is being made on the Fiji-New Zealand-Australia trade. The excellence of the subsidised foreign service need not be disputed; with similar subsidies Australian companies could equally well provide it. But if the financially unbalanced rivalry is allowed to go on, local shipping enterprise will inevitably go out, and both traders and pleasure seekers will find themselves completely at the mercy of wealthy corporations overseas.

An extension of certain provisions in the Navigation Act to New Zealand would only be following a precedent the United States itself set in respect of Hawaii, and it would be a fair and effectual way of affording our shipping some protection against foreign subsidies, even as we seek to protect other of our industries against the competition of low-wage foreign countries.

It was recently estimated that some 5000 of Australia’s maritime workers are unemployed, while United States vessels, supported by euphemistic “mail subsU dies,” are making ever deeper cuts into a portion of our seaborne trade which, according to every conceivable canon of fair play, should fall to our own people. These United States subsidies arc depriving our unemployed of direct opportunities for work; the wages, the freights, the fares circulating in the two countries would make their indirect impact on the general prosperity. 'Meantime it is all in large measure being transferred to a country which makes no offer of reciprocity. The Federal Government has been inexcusably inactive. It was at first promised that the matter would receive exhaustive consideration ■ at Ottawa, but conversations were at that time adjourned. Shipping subsidies and their restrictive effects had a prominent place on the World Conference agenda, but there also the question was advanced no further. The Governments of Australia and New Zealand should treat these facts as an incentive to apply themselves promptly and constructively to the more local aspects of the problem. With respect to the Fiji section, the British Government would, of course, be a consultant, and there seems to be no reason to suppose that its concurrence would be withheld from the measures New Zealand and Australia might propose. But, in justice to the shipping companies, the seamen and the many subdivisions of the maritime industries, the two Governments most directly affected shoi*J provide the legislation obviously and urgently needed.