The Wanganui Chronicle "Nulla Dies Sine Linea." SATURDAY, AUG. 18th, 1917. BRITISH SHIPPING PROFITS.

Wanganui Chronicle, Volume LX, Issue 17065, 18 August 1917, Page 4

The Wanganui Chronicle "Nulla Dies Sine Linea." SATURDAY, AUG. 18th, 1917. BRITISH SHIPPING PROFITS.

Despite the loss of hundreds of vessels since the war began, and notwithstanding that hundreds of others have bean, commandeered for navai and military uses, the profits of British shipping companies have been fabulously large-. These financial results are viewed by the London representative of the New York %cSun" in two lights. One view is that the big profits are testimony to the substantial character of the British shipping industry and an assurance that it will by restored to its primacy after the war without delay. The other is that it is simply a ecaadal that at a time when the nation is expending hundreds of millions in the effort to protect shipping, it should he tho most profitable industry in the' war. It is true, he admits, that ths officers and men of the merchant fleet have been splendidly heroic. For that matter, he says, the naval authorities are wont to suspect that the merchant sailormen are frequently altogether too heroic. They are too willing to take chances. It is the constant complaint that the officers and men alike are unwilling to give proper heed to Admiralty orders about routes to be followed in order to avoid submarines and mines, and that there is altogether too much recklessness about maintaining proper lookouts and other precautions. He avers that there has been no harder task than that of convincing the personnel of tha merchant fleet that even if they don't mind being submarined the country cannot afford to lose its ships. Some of the merchant crews have acted as if they regarded it as rather a bit of sport to be submarined and picked up after a few hours in an open boat. But it is rough on the people at home who lose the ship and her cargo. It certainly strikes the layman as a curious circumstances that a shipping company is permitted to make an actual profit, sometimes a very large one, by the submarining of its ships. And yet that can actually happen unider the present insurance arrangement. The Government maritime insurance scheme carried 80 per cent of the insurable valuation, and the balance has

been carried by insurance. Inasmuch as the value of ships has risen greatly since the war started, a vessel carried on the books of the company at present valuations, and lost, brings to the owners from the Government funds SO per cent, of the insured valuation, which represents an immense increase over its valuation at the beginning of the war. Thus, while the sailors and officers are none too careful about taking care of the property entrusted to them, their very carelessness may produce profits for their owners. The public in the end pays the indemnities —pays them in the form of excessively high shipping rates. Of course, the ship-owners must pay high premiums, but these are easily enough earned with shipping tariffs at their present scale. It is therefore not surprising that tremendous and continuous shipping losses are forcing attention to these conditions. It is pointed out that almost no other business took «o few chances of losses as shipping. The ship owner from the very beginning has seen his ships getting more and more valuable, has progressively raised his rates as ship values and submarine dangers increased, and if ho lost a ship he has been promptly paid for it. Other businesses have had to take the risks of ordinary times plus the extraordinary risks of war times. Other plants have shown depreciation in value, and not a few have been rendered practically worthless because their market tvas cut off by the war. The ship is the one "plant" that has not a chance to lose in value or to involve its owner in a loss. In some cases shipping companies have distributed dividends as large as their total investments, even after paying the excess profits tax exacted by the Government. The Government has taken over a good many vessels for its* own use and has assumed a general.control of the whole shippping situation, but this has only served to increase the pro fits of those vessels which were not taken over, but were left in the hands of their owners, free to earn as big profits as the traffic would bear. And the fraffic has been compelled to provide very large ones. In 1916, for instance, the Cunard Company, after paying it« income and excess profit taxes, set aside £1,500,000 for depreciation, which was almost three times as large a sum as was added to this account in the previous year. It placed £250,000 in its reserve account, carried forwai-d £150,000, and still had a profit of £2,500,000 for its stock holders, which was just about 50 per cent more than the profits for 1915. Th c company paid a dividend of 10 per cent, on common shares in cash, and this gave stock holders the choice between an. additional ten per cent, dividend or its equivalent in new stock issued as dividend. During 1916 the Cunard Company absorbed the Commonwealth and Dominion Line, pooled its interests with the Canadian Northern Steamship Co., and became heavily interested in the business of Flinch, Edye and Co. The Peninsular and Oriental, another of the greatest steamship companies, absorbed the British India Steam Navigation Company just before the war, | and since the war began they have taken over the New Zealand Steamship Company and the Federal Line. This combination is credited with controlling 1.387,000 gross tonnage. The FurnessWithy Shipping Company has absorbed the Prince Line, a concern that was paying 30 per cent, dividends. The Furness-Withy Compauy is not only a ship-owning company, but the proprietor of docks, shipbuilding yards, and iron-works. In 1916 it earned nearly seven million dollars, which was twice as much as its profits for the preceding year, and it paid a 20 per cent, dividend, which was twice its dividend of tl;e preceding year. The consolidation of the Anchor Line and the Donaldson Line has also been effected, the Anchor being a subsidiary of the Cunard. Petersen and Co. took over the vessels of the Calliope Steamship Company and those aJso of the London Marine Steamship Company. The shipping firm of Percy Samuel and Co. purchased the two steamships of the Ariadne Steamship Company, paying two million dollars for them, the transaction being carried ©ut in the name of Percy Samuel, head of the corporation that bears his name. Mr Samuel also secured control of the Kestell Steamship Company a,nd the Occidental and Oriental Steam Navigation Company. John Corrie and Sons, of Cardiff, Wales, bought the line of Orders and Handford, paying for the stock at. the rate of four for one. The biggest private ship-owning firm in the world is now said to be Alfred Holt and Co., of Liverpool, owning eighty vessels, most of them at present in the Far Eastern trade. This concern controls the Ocean Steamship Company, the China Mail Steam Navigation Company, and the Bin© Funnel Line. It has lately added the India Line. It is announced in shipping circles that a combination has been effected between the Canadian Pacific steamship interests, the Allan Line, the Cunard and Canadian Northern shipping lines, with the purpose of dominating the shipping between Great Britain and Canada. Another "merger," in which New Zealand is particularly interested, is thajt which, if consummated, will place the vessels of the U.S.S. fleet in the control of one of the greatest combinevS. These are a few of the huge consolidations that have been reported for the last year. The effect of them is to centralise the control of shipping in a comparatively few hands at a time when it is felt that public interests require either the advantage of vigorous competition or rigorous Government control, in order to prevent excessive charges. Th c Government 'has now announced that it will take over complete control of the whole merchant shipping business, but the details and effects of this are not yet very well understood. As the correspondent says, British sentiment towards the mercantile marine is a good deal bke the sentiment towards the Navy; it has been almost wicked to criticise any development which seemed to mdi

cate that the merchant marine was

[prosperous and powerful. But the pubiic begins to wonder whether it should be obliged to contribute the immense profits which the shipowners are accumulating, and also provide the shipowners with the opportunities which they are now enjoying for the organisation of combinations that in future may be able to defy competition. There is little chance the shipping rates will be reduced very fast after the war. With stocks of goods depleted to the lowest possible point all over the world, and the number of ships reduced far beyond requirements, it is realised that the coming of peace, though it will | mean an end of the huge profits and spectacular opportunities of munitions manufacturers and some other special industries, will be only an incident to the shipping business. Indeed, some people assume that when the war is over and new ships can be had for the immense business that will then demand them, the cost of building ships will presently go down, but the rates will remain high, thus making it possible for new ships built under the new conditions to earn profits just as high as those of vessels which during the war, changed hands at many times their normal values..