The Southland Times. PUBLISHED EVERY MORNING. “Luceo Non Uro.” WEDNESDAY, DECEMBER 18, 1935. SHIPPING SUBSIDIES

Southland Times, Issue 22767, 18 December 1935, Page 4

The Southland Times. PUBLISHED EVERY MORNING. “Luceo Non Uro.” WEDNESDAY, DECEMBER 18, 1935. SHIPPING SUBSIDIES

When the menace of the United States subsidized steamers in the Pacific trade was first mentioned, it was anticipated that the attack on British shipping in the Atlantic would become more pronounced in later years, and with the announcement that Mr Paul Chapman has urged on the United States Government the desirability of assisting in the construction of two super-liners to overshadow the Normandie and Queen Mary, it would appear that this new effort is at hand. Government subsidies have been used to advance the trade of United States shipping in the South Atlantic, and also in the North Atlantic; but it has been utilized principally in connection with the cargo services at moderate speed and in the smaller liners. However, the success achieved by the American Steamship Companies in the Pacific as a result of the heavy bounties given by the United States Government, has been sufficiently marked to make the shipping companies of the United States anxious to expand the system. Time and time again, the significance of the shipping war in the Pacific has been mentioned. In some quarters it was argued that the difficulties so far as the Pacific was concerned, were confined to those companies sailing under the Red Ensign which were interested in the Pacific trade, but people who could look ahead, could see the grim possibility of an extension of lavish subsidies to other sea routes to develop an attack upon one of Britain’s most valued industries. The income drawn from cargo trade by British shipping companies is very large, and it has played an important part through the years, almost a vital part, in maintaining Britain’s economic strength, because the income drawn from her shipping,

considered as invisible exports, has redressed the persistent adverse balance of trade. In addition, the strength of the shipping trade has been reflected in the ship-building industry, and it is, therefore, clear that any serious attack on her merchant marine is of vital consequence to Britain. The competition in the Pacific is not fair. United States ships have a monopoly of the trade between the United States Coast and the United States possessions in the Pacific. This means that the British shipping trade between the North American continent and New Zealand cannot carry a cargo to Hawaii, but United States ships, in addition to having the monopoly of this section of the route are free to trade between the British possessions on a par with British ships. This is a tremendous advantage, and it is accentuated by the liberal payments from the United States Treasury, which supplies the shipping companies with cheap money for the construction of luxury liners and adds a bonus for every mile travelled at a specified speed. These subsidies are not payments for the carriage of mail, they are grants which enable the companies to put fast, luxurious liners into the Pacific trade on terms which preclude competition by British ships. For a long time the British companies, in which the Union Steamship Company is interested, have maintained their services against this subventioned rivalry, but finally they have been compelled to announce their withdrawal from the service, defeated by the subsidies from the United States Government. The Coalition Government of New Zealand, it was reported, has had this matter in hand and has had many discussions with the Commonwealth Government to see what could be done. Undoubtedly some delay in dealing with this matter was caused by the British Government’s anxiety that instead of competitive government grants, there should be some international agreement under which government assistance should be rigidly restricted or eliminated. Norway and Britain adhere to the latter policy, but most of the other nations are averse to giving up their subvention method, because they realize that if it comes to a straight-out battle without government aid, they cannot hope to compete with two maritime nations like Britain and Norway. The Labour Government in this country has inherited that problem, and the recent announcement of the withdrawal of the British ships from the trans-Pacific trade has awakened Mr Savageto the necessity for prompt action.' The Commonwealth Government is aware of the danger of this form of com-, petition, and Australia and New Zealand should be in a position to do something to protect the British merchant marine, but they must first overcome the diffidence of the British Government. There is no reason why, as a first stage, some effort should not be made to meet the advantage given by the shipping laws which give to the United States ships a monopoly of the trade between the United States and Hawaii, but even when that is done the greater difficulty of the subventions remains, and this will have to be tackled firmly if Britain’s place in world shipping is to be saved. President Roosevelt, at one stage, appeared to be ready to remove this unfair advantage from the American shipping companies, but evidently the pressure brought upon his Government was strong enough to prevent anything of an effective nature being done, and to-day it would appear that the shipping companies are confident of their ability to persuade President Roosevelt to agree to make grants large enough to justify the construction of vessels larger and faster than those designed for France and Britain. This matter, having hung fire so long, we can expect the Labour Government of this country to take up the matter with some energy, in an endeavour to reach some agreement with the Australian Government and with the British Government that will make concerted action possible for the reasonable protection of the British merchant service.