The Wanganui Herald (Published Daily.) MONDAY, AUGUST 9. FARMERS AND SHIPPING.

Wanganui Herald, Volume LIII, Issue 160723, 9 August 1920, Page 8

The Wanganui Herald (Published Daily.) MONDAY, AUGUST 9. FARMERS AND SHIPPING.

A question of practical interest to every farmer and indeed to every producer and consumer in the Dominion, was raised at the recent conference of the New Zealand Farmers’ Union in the proposal to establish a co-operative shipping company. The N.Z. Herald points out that farmers have long toyed with the idea of constituting themselves their own ocean carriers, and thinks it is well that the notion should be brought to the test of an impartial analysis, as it will be if the conference proposed by Mr J. Boddie is called. The great distance of the Dominion from its principal market makes the rate of freight a vital one to the whole community, and if the farmers, either on their own account or in conjunction with importers, are able to carry the Dominion’s trade across the ocean at a lower rate than private enterprise they are fully justified in entering the shipping business. Our Auckland contemporary, however, utters a note of warning and says that It is well the farmers should remember that to provide enough tonnage for the Dominion’s requirements will be a very large- order and that while competition on a limited scale may lead to rate-cutting, it may also lead to the withdrawal of some of the present trade facilities. Freights are high and 1 so are shipping profits, but the cost of tonnage has also advanced enormously, and the N.Z. Herald thinks that if New Zealand farmers attempted at the present time to purchase or construct vessels they would be compelled to pay a very high price, perhaps only to find that the shipping boom had burst shortly after they commenced operations. Shipping business is at the moment highly speculative. Most owners expect a slump in freights, but opinions differ greatly as to when it will come. Some companies are increasing their tonnage rapidly; others are alarmed at the high cost of construction, and are postponing or cancelling contracts; freight rates respond very quickly to the law of supply and demand—experience sugr gests that an excess of 2 % per cent, over the world’s tonnage requirements causes a slump, and a deficiency of 2% per cent, a boom—■ and it is certain that if construction

proceeds at the present rate in iritaln, the United States, and elsewhere, there will be an over-supply of ships within ,a comparatively short period. This view is emphasised by the recent report that many large steamers are idle in Japan, that 50 other vessels will soon be released from the old charter contracts, and that the price of ships has materially declined.

Information contained in latest English newspapers to hand affords further confirmation of the reduction in shipping freights. Early this year a freight of 30/- a ton per month could be secured for highclass British cargo steamers. Then the rate eased to about 27/6 a ton. It declined further to 25/- a ton, at which it long stood. At the date mentioned the rates quoted were only from 20/- to 22/6 a ton, while some brokers were confident that tonnage could he secured at 20/- a ton deadweight for six months. Coal freights for voyages from North America to Europe, in which a vast business has lately been transacted, have also been very much easier. It is also reported by the Port of London Authority, that there were then no ships, using their docks, that were waiting, in dock either to load or to discharge, or waiting in the river to enter dock. Prom this it may be assumed that the very serious congestion in the Thames which prevailed in the earlier part of the year has been overcome, and that there is but little, if any, tonnage now held up for want of storage into which to 'discharge cargo. Doubtless, as British industries overtake the heavy accumulation of home demands, there will be available a gradually increasing volume of goods available for export. But we imagine that the increase in the volume of available shipping will more than keep pace with this. These considerations suggest that farmers have everything to gain by exercising patience, but they in no way depreciate the value of the proposed inquiry. Indeed, they infer that if the time is inopportune for establishing a co-operative shipping company it may be unusually favourable for negotiation with the lines now serving New Zealand with a view to future freight arrangements.