The Southland Times MONDAY, AUGUST 29, 1938. A Shipping Service Of Vital Importance

Southland Times, Issue 23599, 29 August 1938, Page 6

The Southland Times MONDAY, AUGUST 29, 1938. A Shipping Service Of Vital Importance

Two cable messages, prixited on Saturday, emphasized different aspects of a problem that is of increasing importance to Britain and the Empire. Lord Craigmyle, chairman of the P. & O. Company, was reported to have said that the construction of ships for the Australian-Canadian service “has merely been postponed.” He went on to speak of high prices, and ended by expressing satisfaction because Australia, Canada, New Zealand and Britain “were determined not to permit a vital British service to be swept away.” It can scarcely be denied that prices at the present time are abnormally high. But this does not alter the fact that the negotiations for an improved CanadianPacific service have been carried out in a spirit of merely tepid enthusiasm, and that excuses for delay have been welcomed in almost every responsible quarter with a curious disregard for the urgencies of the situation. The blame for apathy cannot be evenly spread: it is probably true that Britain and Australia have shown a greater readiness than Canada and New Zealand to achieve finality quickly, and that New Zealand—apart from a tendency to introduce side issues—has been more willing to collaborate than Canada. But the whole question has been allowed to drag on interminably at a time when the need for action is being stressed by competition, and when the strategic values of an improved service are receiving a special emphasis in the tensions of world politics. As an example of Empire co-operation the history of these negotiations is not encouraging. And there is evidence in a second message printed on Saturday that procrastination is one more threat, not only to the particular service in question, but to the general prospects of British shipping. According to the National Union of Seamen there are now 30,000 seamen and 2000 ships less than in 1914. “Britain at present possesses 28 per cent, of the world’s tonnage, compared with 48 per cent, in 1914.” These figures and percentages may vary slightly in different estimates, but the shrinkage of tonnage is a fact that emerges from every comparison with present and pre-war conditions. One authority states that last year Britain owned gross tonnage (steam and motor-ships only) of 17,436,000 out of a total world tonnage of 65,271,000. In 1914 Britain had 18,892,000 out of a total of 45,404,000, and in 1925 19,305,000 out of 62,380,000. The importance of these figures lies in the fact that Britain’s prosperity does not depend on a favourable trade balance, but on “invisible exports” (shipping income, overseas investments, insurance, etc.) which more than counterbalance the excess of imports over exports. Last year the adverse trade balance was more than 24 per cent, higher than in 1936, largely owing to the volume - of raw materials needed for the rearmament programme. During the same period the gross shipping income improved slightly, but it was expected that the net income—after payment had been made for British cargoes—would show a decline. Overseas investments have been affected by world conditions, and the international outlook gives no encouragement for normal movements in capital. These tendencies cannot be checked suddenly: to a certain extent the yield from invisible exports is dependent on factors over which Britain has no complete control, although they can be modified up to a point by the Government’s foreign policy. It is also true that the growth of foreign competition is a factor that cannot be controlled in Britain. If other nations establish subsidized shipping services they are bound to gain a greater share of world trade, and where these services are being operated with labour costs far below those of British vessels the competition naturally becomes more effective. But a great deal can be done, and no doubt is being done, to meet the threat to existing services by building faster cargo steamers and by catering for modern tourist needs in the passenger lines. Where the threat from foreign competition is to profitable services some attempt should be made to capitalize the years of specialized experience and to introduce all necessary improvements. But the Canadian-Pacific service is something much more than a source of profit. It links three Dominions, and is of obvious strategic importance. There is every reason why British ships of the latest design and with adequate passenger and cargo space should be maintained on this vital route. Costs may be high; but this has not prevented a steady activity in ship building at the British yards. Other nations are able to build vessels for new services in which the profits are merely potential. Surely it is strange that Britain and three of her Dorqinions are between them unable to meet the cost of expanding an existing service that is of real importance in the network of Imperial trade.