PACIFIC TRADE

Otago Daily Times, Issue 23004, 6 October 1936, Page 10

PACIFIC TRADE

SUBSIDISED COMPETITION EFFECT ON BRITISH SHIPPING ALL-RED ROUTE'THREATENED DEFINITE ACTION NECESSARY (Special to Daily Times) WELLINGTON. Oct. 5. The principle of protecting British shipping against subsidised foreign competition was affirmed by the fourteenth Congress of the Federation of the Chambers of Commerce of the British Empire to-day. There was only one dissentient co the motion, and speaker after speaker stressed the vital need for maintaining British-owned services between parts of the Empire. The following resolution, moved by Mr Spencer Watts (Sydney), was carried:— This congress views with grave concern the serious losses being suffered by British shipping owing to foreign subsidised competition, and whilst reaffirming its adherence to the principle of free, unrestricted and unsubsidised ocean transport services, recommends to the Governments of the United Kingdom and the British dominions that trade facilities, to foreign shipping trading between Empire ports should be granted only to the shipping of those countries which give similar facilities to Empire shipping, and that they should, whether by subsidy or otherwise, afford such assistance as will enable the British mercantile marine to remain, as in the past, one of the greatest bulwarks of the Empire whether in peace or war. Mr Watts said the sponsors of the resolution were only asking for an appropriate variation of the golden rule, "Do unto others what they are doing to us."—(Laughter.) Time was the essence of the contract, and once the resolution was passed the conference should place the whole of its great influence behind its request for immediate action. POLICY OF RESTORATION Mr A. M. Seaman (Auckland), who seconded the resolution, said that the only service of real value to the community was one' which could maintain itself without artificial props, but at the same time they had to recognise that it was necessary to adopt means with which they did not agree. In adopting a policy of restriction the Governments of the Empire must proceed with considerable delicacy as a portion of the revenue earned by British ships came from foreign ser- "' vices. The subsidised competition of the Matson Line was an illustration of the problem that was facing British shipping, and he used this example, not with any antagonism to America, because he was convinced Britain and America had common responsibilities and a common trusteeship in he Pacific. The American lines in the Pacific- were maintaining faster and more luxurious vessels than the trade warranted, and not only was the British service to San Francisco closing down, but the All Red Route was threatened. The American Government was, subsidising both the construction and running of the Matson liners in the Pacific, and on top of that had ruled that British ships could not trade between Hawaii and American ports. British shipping could not live against such competition, and it was unfortunate that British people were more concerned with their own comfort than with the future of their shipping. The security of the Empire was involved, and immediate and definite action was necessary. Mr T. B. Hooper (Brisbane) said that British people should not allow other countries to gain control by the aid of subsidies, even if it were necessary for the Empire Governments to grant subsidies to meet the competition. Mr J. T. Martin (Wellington) said that New Zealand had a shipping company thr had operated for over 50 years, and New Zealanders should protect their own shipping by asking for assistance similar to that given to American shipping. MUST ACT IN CONCERT Sir Thomas Wilford (chairman of the council) supported the resolution, and said that the first fact they had got to agree upon was that the whole Empire must act in concert. Great Britair had owned 29.23 per cent, of the world's shipping in 1914, and in 1935 owned only 26.83 per cent. Great Britain was faced with a problem both in the Pacific and in regard to India. She could, if she would, use her purchasing power to secure equal treatment in ocean trade. All me delegates would admit that an adequate mercantile marine must be maintained, for all merchant ships of fast speed in time of- war were auxiliary cruisers. War might come at any time, and American ships might be withdrawn from the Pacific with disastrous results. America was . establishing in the Pacific a national steamship service which, if something were not done, would compel British shipping to abandon the Pacific trade. "I believe that the maintenance of Pacific'routes is a material as well as a national necessity," he said. " I do not believe in subsidies or Stateowned ships. Subsidies always seem to me like a whiff of oxygen given to a dying man, but needs must when the devil drives. Subsidies must be paid in the meantime because it takes time to build ships." Sir Thomas suggested that the representatives of New Zealand, Australia and Canada who would all be in London in May should make direct representations to the British Government for the organisation of a partnership in the Pacific trade to build ships and maintain the services with money by way of loans guaranteed by all four countries. Ships could be built by the four Governments and in the meantime they could co-operate to keep the British flag flying in the Pacific because withdrawal for even a day would be a blow at British prestige. When the new ships were ready, if the scheme were adopted, he suggested that the route to Vancouver should be via San Francisco. BRITISH POLICY CRITICISED Mr J. E. Emlyn-Jones (Cardiff and Newport) said that the British Government under the Trade Facilities Act had been subsidising the building of ships for years. The British policy had not been as pure as had been made out. The policy of granting cheap money for ship construction had brought about the collapse of the Royal Mail Line. The only way to maintain British shipping was to provide better services than were being offered by foreign companies. The solution of the Pacific

problem was the utilisation of British ships by British people. If the principle of subsidising were adopted for shipping there was a great danger of it spreading to other spheres of activity. In Cardiff, which was the centre of the coal export trade, they never saw the American flag and they were successfully carrying coal to France in competition with subsidised French ships. The same thing applied to the Mediterranean and other parts of the world, where British shipping was more than holding its own. What they should concentrate on was the expansion of trade between different parts of the Empire. A SUBSIDY ESSENTIAL Mr C. Granville Gibson (Leeds) said that he could not agree with the defeatist attitude of the previous speaker. The resolution reaffirmed the principle of unrestricted, unsubsidised shipping, but at the same time they realised that unless subsidised competition were adequately controlled British shipping would disappear from the Pacific. It was necessary that subsidy should be met with subsidy. It was only fair and reasonable that New Zealand and Australian ports should be as coastal ports'between which American ships could not trade so long as they adopted a similar attitude towards British vessels. Mr C. A. L. Treadwell (Hongkong) supported the resolution. He said the Cardiff delegate had given a false emphasis to the position. They had to face a new order ot things and meet subsidy ■ by subSl Mr A. Wigglesworth (London) said the subsidy which the British Government had given to tramp shipping had re-vitalised those services. Foreign services had not retaliated but had come into line. Before any subsidies were granted, however, a world conference of shipping interests should be called in London for the purpose of defining subsidies. Britain should tell foreign countries that she intended to grant subsidies and ther ask them to agree to some mutual understanding as to the limitation of subsidies and restrictions. , Mr Emlyn-Jones was the only opponent of the resolution. PACIFIC SERVICES Sir Thomas Wilford moved: " That this congress views with grave anxiety the possibility of the withdrawal, owing to serious subsidised competition, of the British liners plying between Canada, Australia, and New Zealand, and urges all the Governments concerned to take early action in the interests of British trade in the Pacific to preserve this link in the All-Red shipping route." . , . Sir Thomas said he wanted to make it clear that he was not in favour of State-owned fleets. The Governments should provide the money to enable the shipping companies to build modern mercantile fleets. , A ~. ~ Mr A. G. Lunn (Auckland) seconded the resolution. Sir Montague Burton (London) suggested that a conference should be held on the subject Mr T. F. Matthews (Toronto) said that while he agreed that a conference with American interests might be helpful he considered that ships should be built first. A considerable trade had been built up between New Zealand, Australia and Canada, and he wanted to see the shipping services maintained. Mr M. G. M'Caull (New Zealand Associated Chambers' said that New Zealand's overseas trade was her life-blood and would have to be maintained at -all costs. Mr W. B. Darker (Adelaide) suggested that the congress, while realising the importance of the resolution, might be unwise to go on with it, as it applied to a sectional interest. Lord Elibank said the ships concerned were part of the All-Red route of British shipping around the world, and if one part was sacrificed it would affect the whole. Mr Emlyn-Jones moved that the whole question of British shipping in the Pacific should be deferred pending a conference between Great Britain, Canada, Australia. New Zealand and America with a view to arriving at an understanding as to the participation of British and American shipping in the Pacific. This was seconded by Mr F. W. Cook (Dudley), but was defeated, and Sir Thomas Wilford's resolution was carried.