DIRECT SERVICE BETWEEN NEW ZEALAND AND WESTERN AUSTRALIA. COMPARATIVE STATEMENT OF FREIGHTS BETWEEN AUSTRALIA, NEW ZEALAND AND EUROPE.

Appendix to the Journals of the House of Representatives, 1897 Session II, H-28

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SeSS, 11.—1897. NEW ZEALAND.

DIRECT SERVICE BETWEEN NEW ZEALAND AND WESTERN AUSTRALIA. COMPARATIVE STATEMENT OF FREIGHTS BETWEEN AUSTRALIA, NEW ZEALAND AND EUROPE.

Presented to both Houses of the General Assembly by Command of His Excellency.

g IB Dunedin, 3rd September, 1896. We venture to address you on the subject of a direct monthly steam service from New Zealand to Fremantle, Western Australia, which it is our intention to establish if we can get sufficient encouragement. At present there is going forward from Dunedin and the Bluff every ten days from seven thousand to ten thousand sacks of oats for transhipment at Melbourne, and the rate of freight at present charged by the Union Company, who monopolize the business, is £1 9s.* per ton of 2,240 lb. This we consider is excessive, and could be reduced at least 25 per cent, by a direct service. Besides giving the producer in New Zealand the benefit of this reduction, a direct service would be the means of finding a market for a great many other articles of our produce that the other colonies at present supply. Another serious objection to the present position is that orders from Western Australia are only available to New Zealand shippers through Melbourne brokers and middlemen, who are getting the cream of the profit. A direct service would be the means of getting past these people. The Union Company, although they know the trade warrants a direct service, will not entertain the business because they are doing very well at present by carrying all goods from New Zealand bound to Western Australia to Melbourne at 13s. per ton freight, and they are anxious to maintain amicable relations with the other Australian steamship companies, whom they fear, and whom they favour with a share of the cargo in their hands for transhipment to Western Australia. Apart from the necessity of a direct service, any action of the Government in supporting to establish a line would be exceedingly popular, and would at once advance the values of a number of our products. The only remunerative outlet for New Zealand oats at present is Western Australia, and this line would immediately advance in value to correspond with the reduction in freight; and the same may be said of oatmeal, butter, cheese, bacon and hams, and, though not to the same extent, flour, potatoes, hay, chaff, and timber. Our intention is to establish a service from Sydney, calling at Auckland, Wellington, Lyttelton, Dunedin, Bluff, and thence to Fremantle. This would give an opportunity to Auckland people to ship kauri timber, for which there is a large market in Fremantle, at present supplied from Puget Sound and the Baltic. The alternative route is Melbourne to Greymouth or Westport to coal, thence Wellington, Lyttelton, Dunedin, Bluff, and Fremantle. This would give the West Coast an opportunity to ship timber to Fremantle. If your Government could see your way to subsidise a monthly service for six months, until the service is established and can stand on its own bottom, we feel sure it will be of great benefit to the colony generally and be a very popular measure. The steamers we propose to employ are large carriers, with a capacity of at least 2,500 tons, will steam twelve knots, fitted with electric light and ample passenger accommodation. Commending this matter to your careful attention, and any further information required will be promptly placed at your disposal, Yours, &c., pp. J. H. Stanley and Co., The Hon. the Premier, Wellington. G. S. Munko.

A few years ago the enterprise of Otago merchants in securing business in new fields could always be counted upon. What a market is being neglected in Western Australia is thus referred to by Mr. John Cormack in a letter from him to the Tuapeka Times: " What I wish to call your attention specially to is that you farmers should bestir yourselves to secure your fair share of the great golden harvest now being gathered, and from which you seem almost entirely shut out. Almost all the oats you send to Melbourne come to Western Australia, but the heavy freights and th& transhipment charges give you very unfair returns. I understand the Union Steamship Company

* Owing to the block at Fremantle freights have now advanced to £2 4s. per ton.

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bought off the opposition by Huddart, Parker, and Co., by agreeing to confine their trips to eastern ports ; but the farmers should endeavour to get this altered, and have direct trade with this colony. The goods sent by New Zealand have the first bid on the goldfields; but there is far too little of them. We could easily take all the wheat, oats, barley, oatmeal, butter, cheese, bacon, ham, preserved meats, and preserved vegetables Otago could send us. And, mind you, we have scarcely started yet. We get good butter from Taranaki, and preserves from Irvine and Stevenson, of Dunedin; but business in the latter is, for some reason, not pushed on the field. You have plenty good business men who, if they were here, with fair prospects of steady, direct supplies, could dispose of the whole of your produce very much to your advantage."

Industries and Commerce Department, Gentlemen, — Wellington, 16th January, 1897. I am desired by the Minister of this department to acknowledge the receipt of your letter of the 3rd September, 1896, addressed to the Hon. the Premier, relative to the subsidising by the Government of a line of steamers to West Australia. In reply, I am to inform you that the Government some months ago made inquiries on this subject, and ascertained that the difficulty of obtaining freight direct was the great distance to be run —nearly three thousand miles—and the fact of there being no return cargo. I am, however, to ask you to inform the Minister what subsidy would be required to initiate for six 'months the service you have in contemplation. As regards the export of oats, I am to point out that from information received from a firm at Fremantle, West Australia, the current price there for oats is 3s. Id., while the Customs duties are 4d.; and, if freight is added, there would be little, if any, margin of profit. I have, &0., Messrs. J. H. Stanley and Co., P.O. Box 35, Dunedin. Amelius M. Smith.

Deak Sik, — Dunedin, 20th January, 1897. We are duly in receipt of your letter of the 16th instant, in reference to a direct service to Western Australia. Our idea of a subsidy would be £500 per round voyage. In consideration of this, we would guarantee to reduce the present rate of freight by 25 per cent. The principal article of export would be oats, and this reduction would represent 2d. per bushel, a substantial benefit to those who grow them. We are only one of the many exporting firms here, and we are shipping about 4,000 sacks oats per month to Fremantle, which we are selling at present at 2s. 7d. and 2s. Bd. c.i.f. ; and if it was not for this outlet oats would to-day be selling here at Is. Bd. instead of Is. lid. This outlet should be fostered by the Government, as the same remarks apply to bran, pollard, flour, potatoes, cheese, butter, hams and bacon, wheat, chaff. All these lines we are continually shipping to Western Australia, but we find ourselves handicapped by the excessive freights now ruling, and the delay occasioned by transhipment in Melbourne. This is a most important matter, and demands the attention of your Government, because the freight business of this colony is so much monopolized that it is becoming a serious drawback to the progress of the colony. One cannot blame the companies, as their object is to make profits for their shareholders; but where the welfare of the colony is at stake, and the colonists are helpless, then it is the duty of the Government to step in and assist with bonuses to develop remedies. If we are not taxing your time too much, might we draw your attention to the iniquitous freights that are being charged on wool from New Zealand to London. The present rate by sailing-vessel from any of the main ports of New Zealand is. Jd. per pound, while the corresponding rate from Sydney to London is just 60 per cent. less. As a matter of fact, we have been shipping all our wool to London via Sydney, and, after paying the cost of freight by steamer from New Zealand to Sydney, and the cost of transhipping, we are still saving 20 per cent. We are also shipping large quantities of sheepskins and rabbitskins, and saving from 50 to 80 per cent, of freight. To assist the present shipping companies to maintain their monopoly, and to balk any attempt on the part of New Zealand traders taking advantage of the freight obtainable via Sydney, the Union Steamship Company and Huddart Parker charge the monstrous freight of 6s. per bale oil wool from New Zealand to Sydney, just about the same amount as the Sydney vessel charges to carry the wool from Sydney to London. As a quid pro quo for this good turn, the New Zealand Shipping Company and Shaw-Savill Company place large orders for coal with the Union Steamship Company, or with mines whose coal the Union Company freight; also give both companies cargoes of transhipments and passengers for way-ports out of their Direct steamers and sailers ; and to maintain this amicable and profitable arrangement the producer is sweated in the most outrageous manner. The attached letter, signed "Exporter," which appeared in the Otago Daily Times, corroborates all the above contentions. If your Government are prepared to take this matter up, we will be only too glad to advise as to the proper manner to go to work to remedy what is at present eating the vitals out of the colony. It is useless consulting any of the leading merchants of New Zealand on this subject, as either one or the other of these companies have Jihem all in their toils, some as sub-agents,' some as local directors, or getting some concession by way of rebates, the cost of the whole

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thing falling on the farmer, whose produce has to pay the excessive freight that supports the whole combination. Commending the matter to the consideration of your Minister, and freely offering further information, advice, or service if required, We are, &c, pp. J. H. Stanley and Co., G. S. Munro. The Secretary, Department of Industries and Commerce, Wellington.

SHIPPING FREIGHTS To the Editor, Otago Daily Times. Sir, —I am very pleased to notice that Dunedin is at last waking up to the necessity of encouraging free trade in the shipping business of this colony. We all cry out about the increase of the national debt and the heavy drain for interest on loans, but let me tell you that the present shipping monopoly bids fair to rival the national debt as a drain upon the resources of the colony. Take the freight upon frozen mutton : In New Zealand, with a fully-developed trade, the present rate of freight is Id. per pound, plus 10 per cent, primage, from November to May; from June to October (during the winter months when we have no supplies) the freight is fd. per pound; while the freight on mutton from Australia to London all the year round is fd. per pound, and most of the steamers carrying at this rate of freight actually pass our own doors on the way to London. Wool : Sailer freights from New Zealand ports to London by the combined companies are Jd. per pound for greasy and fd. per pound for washed, while the corresponding rates from Sydney to London are fVi and -fed. Rabbitskins : Sailers' freight from New Zealand ports to London is fd. per pound, equal to £5 16s. Bd. per ton of 2,2401b., while freight from Sydney to London on this line is obtainable at £2 and £2 ss. per ton of 2,240 lb. Sheepskins : Sailers' freight from New Zealand ports to London is Jd. per pound, equal to £4 13s. 4d. per ton of 2,2401b. ; while freight from Sydney to London on the same goods is obtainable at £1 15s. and £2 per ton of 2,240 lb. The same comparison applies to all descriptions of produce ; and I repeat that the drain on this colony of the shipping monopoly bids fair to rival that of the national debt, as the foregoing figures conclusively prove. The combined companies reply that notwithstanding these apparently excessive rates the companies are not paying. Then, all I can say is that there must be gross mismanagement, and the sooner they retire from the business the better for the colony.—l am, &c, 23rd December. Exporter.

Dear Sir,— Dunedin, 17th March, 1897. Referring to our letter of the 20th January last, on the subject of freights, we notice the Premier during his late visit to Australia has been making inquiries into this matter, and, no doubt, has ascertained the bona fides of the statements contained in our letter referred to above. Since writing you on the 20th January last we have been the means of reducing the freights on wool to London by 25 per cent. This step was brought about by our putting the barque "Peru" on the berth at Dunedin and the barque " Laira " on the berth at the Bluff at reduced rates of freight. Notwithstanding strong opposition from the monopoly, we have succeeded in loading our vessels; but we have had to suffer from slander and the meanest possible tactics because we dared to attack the present strong monopoly. Frozen Meat: We are now endeavouring to bring about a reduction in the freight on this article. Australia is only paying -Jd. per lb. freight, and we have the offer of a steamer to load next month at this rate, and we have the meat purchased to load her ; but the influence of the monopoly is stronger on the board of directors of the Freezing Company than that of the shareholders, and they decline to freeze the meat for shipment by our steamer. These difficulties require drastic remedies, and we will be glad to assist your Government in every way possible to free the colony of the present monopoly and get better terms for freights. The writer, Mr. Munro, will be in Wellington shortly, and would be glad to discuss the freight question fully with you if it would be convenient and if you think any good could be done. Yours, &c, pp. J. H. Stanley and Co., G. S. Munro. « The Secretary, Department of Industries and Commerce, Wellington.

Hon. Pebmihb, — Department of Trade and Customs, Wellington, 14th March, 1897. I have the honour to submit, for your information, the following reports on matters inquired into by me in Australia, in accordance with your instructions: — A. Eates of freight on produce shipped to the United Kingdom. (The New Zealand rates are also stated for comparison.)

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B. Rates of freight on produce from Melbourne to Western Australia. Since my return I have obtained the through rates from New Zealand to Western Australia and the ordinary rates to Melbourne, for comparison. C. Rates of freight by German and French steamers. W. T. Glasgow, Secretary and Inspector of Customs.

A. —Rates op Freight on Produce Shipped to the United Kingdom. Hon. Premier, — In accordance with your instructions, I made inquiries while in Australia about the current rates of freight on produce shipped to the United Kingdom. I have tabulated the information received, and you will find it on sheet attached hereto. Since returning, I have ascertained the current New Zealand rates, and have included them for comparison in the table. It will be seen that in Melbourne the rate for wool is less than that in Sydney to the extent of 5 per cent, for steamers and 10 per cent, for sailing vessels. In Adelaide the rate is about 50 per cent, higher for greasy and about 30 per cent, for scoured wool than in Sydney. In New Zealand the rate is about double that in Sydney. It is claimed that this is partly accounted for by the fact that in Now Zealand the large steamers have to go to several ports to load; but this, it seems to me, is not a sufficient explanation. In Melbourne the rate for frozen meat is slightly less than that in Sydney. In Adelaide it is 50 per cent, more than in Sydney. In New Zealand it is more than double during the season from November to May. During the winter the rate is reduced by about 25 per cent., but there is little exported at that time of the year. The Gear Company have an arrangement with the shipping companies for a reduction from the nominal rate in the event of the meat not bringing a certain price in London. The shipping companies thus share in the risk. The farmers who ship on their own. account do not get any reduction in freight under any circumstances. If they ship through the Gear Company, and the latter get a reduction under the arrangement referred to, it is not allowed to the farmers by the Gear Company. In Melbourne I ascertained that the railway-rate is 10£ d. per mile for 8 tons. This is a special rate agreed to by the department with much reluctance before exporters erected the large freezing-works at Deniliquin. It will probably be increased. The Railway Department provides insulated cars, which are very efficient. These cars carry frozen meat for over forty hours in summer without any sign of thawing. Deniliquin mutton is carried on these cars two hundred miles without mechanical aids, such as ice. The shade temperature at Deniliquin sometimes reaches 114° Fahr. I was assured that meat could be safely carried from any railway-station in Australia to the seaboard if it is hard-frozen, and if the cars are properly insulated and large enough to contain, say, over three hundred carcases. Government provides storage in Melbourne at Bd. per carcase for freezing, handling, and bagging. This is only meant to accommodate small farmers who have small lots. Not more than three thousand carcases per week are dealt with in the Government store. The Department of Agriculture complains that Bd. per.head involves a loss. Probably lOd. would cover the whole expense. In the case of butter and cheese the rates appear to be the same in Melbourne, Sydney, and Adelaide. In the latter colony no cheese is as yet exported. In New Zealand the rate for butter is 10 per cent, more than in Australia, and for cheese about fd. less. W. T. Glasgow, 12th March, 1897. Secretary and Inspector.

Rates of Freight on Produce.

Article. Melbourne. Sydney. Adelaide. Now Zealand. Wool Greasy, j^d.—less 5 per cent. in steamers, 10 per cent, in sailers Scoured, —less 5 per cent. in steamers, 10 per cent, in sailers Government rate for small lots frozen for farmers, Bd. *f< s d.; sailers and steamers the same Ad|J!d. steamers, sailers. -/Sjd.; sailers and steamers the same Ad. Jjfd. steamers, fgd. sailers. Frozen meat.. r H s d.; sailers and steamers the same JJd. Sheep, fjid., plus 10 per cent, from November to May ; lamb, plus 10 per cent, from November to May. Sheep, }§cl., plus 10 per cent, from June to October; lambs, Jfd., plus 10 per cent, from June to October. Jfd., plus 10 per cent. Freezing companies' rate, f$d., sometimes falling to f^L Butter \l&. (all butter-freight contracts are arrangid by the Government) he same .. }§d. ; sailors and steamers the same H*Cheese The same None exported -jj,d., plus 10 per oent. * Dal Igety and Co. quote greasy to -^d.; scoured, f R o\. to j^d.; sailers and steamers the same.

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B. —Freights, on Produce shipped from Melbourne and Sydney to Western Australia. Hon. Premier, — The information which I obtained in Australia was as follows :— 3 Sailer. Steamer. Melbourne,— s. d. £ s. d. Wheat, per 2,240 lb. ... ... ... ... 12 6 10 0 Oats, per 2,240 lb. ... ... ... ... 12 6 10 0 Butter and cheese as ordinary cargo ... 100 Live-stock— Cattle, per head ... ... ... 400 Sheep, per head ... ... ... 060 Frozen meat, per pound... ... ... 0 0 1 Sydney — . ■ ■ Butter, cheese, and grain, per ton (Burns, Philp, and Co.) ... ... ... ... 10 0 Butter, per ton ... ... ... 1 10 0 Cheese and grain, per ton (Adelaide Steamship Company)... ... ... ... 100 At Melbourne recently Messrs. John Cooke and Co. and another shipper combined to charter the " Hinemoa," a large sailing-vessel fitted up with a refrigerator, and 8,000 carcases of mutton and 12,000 sacks of wheat were shipped. The vessel was to remain in Western Australia for six months as a store for the meat. The duty on frozen meat in that colony is 1-Jd. per pound. A good deal of New Zealand grain had been going to Western Australia, but this shipment per "Hinemoa" had stopped the New Zealand exports, the "Talune," which had just arrived, having brought only 10 tons. Freights to Western Australia. , .. , ml . -D.j.. i_ -a 1.1 New Zealand to Melbourne to Article. Through Rate to Fremantle. ~ ~ „ ~ ° Melbourne. Fremantle. £ s. d. £ s. d. £ s. d. £ s. d. Wheat per 2,240 lb. ...176 to 186 0 10 0 100 Oats per 2,240 lb. ... ... 1 10 6 ... 013 0 10 0 Butter and cheese per 40 cubic feet... ... ... 1 17 6to 1 19 6 10 0 10 0 It will be seen from the above that the through rate from New Zealand to Western Australia is about 2s. 6d. per ton less than the freight to Melbourne, plus the freight from thence to Fremantle. The Australian shipping companies make this allowance to the Union Steamship Company, but the latter do not make any reduction between New Zealand and Melbourne on cargo for transhipment to Western Australia. W. T. Glasgow, !■: Secretary and Inspector.

C. —Rates of Freight by German and French Steamers. Hon. Premier, — In accordance with your instructions I made inquiry in Sydney at the Customhouse about freights by the German and French steamers. The Collector was unable to supply the information without applying to the shipping companies. On the day we left Sydney I received from him details which, unfortunately, show only rates on produce to London, and not to the Continent, and do not show the rates on merchandise shipped for Australia. I asked for the latter information,, but, through some misapprehension, it has not been obtained. The rates quoted for produce shipped to London are the same as those by British ships.* As a matter of fact, however, the German and French steamers do not carry produce for the United Kingdom. I examined several outwards reports, and found this to be the case. The shippers were foreign houses, and the goods were consigned to the Continent. These steamers call at Southamption, but do not go to London, so that it is unlikely that shippers to London would send produce by them. I also examined the inwards reports of these steamers," and found that only foreign goods shipped on the Continent come by them. British shippers do not patronise them, possibly because they do not call at London. The German steamers bring much more cargo to Australia than the French—twice as much at least. A very large quantity of heavy ironwork comes from Germany in German steamers. I regret that I am unable to state what advantage Continental shippers have over British shippers in the matter of freight to Australia. As before stated, the details furnished by the Collector do not show this. I understand that there is a good deal of reticence about freights on the part of the foreign companies, and possibly this accounts for the absence of the information. The Collector pointed out some information as to freights published in the New South Wales Statistical Register for 1895. 1 have cut out the part referred to and attach it hereto. The rates for 1895 for wool are about Xd. above those now current. The quotations for France, Germany, and Belgium are practically the same as those for London, but it is not stated whether the rates are those of the German and French steamers, or whether they, are those of the British steamers

* See table attached to Memorandum C on rates of produce shipped to the United Kingdom.

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which take goods for transhipment to the Continent in London. I presume, if there had been any difference, figures for both would have been given. There are no quotations for frozen meat, butter, or cheese. The Collector informed me that brokers chartered sailing-ships as opportunity offered, and took cargo at low rates, sufficient to leave a fair profit on the amount of the charter. W. T. Glasgow, 12th March, 1897. Secretary and Inspector.

Freights from Sydney to London per Sailing and Steam Vessels, 1889-95.

Wool (Greasy) Freights to Europe and United States of America, 1895.

Estimated Amount paid by New Zealand Producers on Produce shipped to United Kingdom at Rates current in New Zealand, and Amount which would be paid if the Rates of Freight were the same as those existing in Victoria.

The above calculation has been made at the rate for steamers. Three-fourths of the wool goes by steamers. The rates for sailing-vessels are somewhat less than for steamers. Roughly, I think, it may be assumed that New Zealand producers pay about £400,000 a year more for freight than would be the case if the rates current in Victoria were in existence in this colony. W. T. Glasgow, Department of Trade and Customs, Secretary and Inspector of Customs. Wellington, 26th March, 1897. Approximate Cost of Paper.-' Preparation, not given; printing (1,;i7. r > copies), £4 ss.

Authority: John Mackay, Government Printer, Wellington.—lB97.

Price, 6d.]

Year. Vessel. Per Pound. Per Toi n Weight. Per Ton Measurement (40 cubic feet). Wool (Greasy). Tallow. Copra. j Leather. Hides. Preserved Measurement Meats. Goods. 1889 1890 1891 1892 1893 1894 1895 j I ( 1 I 1 \ { j I 1 1 Sailing Steam Sailing Steam Sailing Steam Sailing Steam Sailing Steam Sailing Steam Sailing Steam W d - to -frd. Jd. to Jd. |d. to Jd. Jd. to fd. |d. to Xd.to Jd. gd. tO #d. gd. to Jd. to |d. to Id. Id. to iTfd. gd. to id. £d. to |d. to Jd. 25/ to 45/ 25/ to 50/ 32/6 to 47/6 35/ to 50/ 26/ to 45/ 32/6 to 45/ 27/6 to 37/6 45/ to 50/ 25/ to 40/ 35/ to 50/ 32/6 to 37/6 40/ to 50/ 17/6 to 35/ 22/6 to 40/ 32/6 to 50/ 50/ 32/6 to 47/6 45/ to 50/ 35/ to 47/6 35/ to 45/ 37/6 to 42/6 40/ to 45/ 27/0 to 30/ 35/ to 40/ 36/3 to 37/6 27/6 to 45/ 40/ to 60/ 35/ to 45/ 45/ to 60/ 27/6 to 40/ 32/6 to 50/ 27/6 to 40/ 40/ to 60/ 25/ to 40/ 35/ to 60/ 32/6 to 40/ 35/ to 50/ 30/ to 40/ 35/ to 65/ 15/ to 20/ 22/6 20/ to 25/ 15/ to 25/ 25/ to 30/ 30/ 17/6 to 25/ 25/ to 35/ 60/ 22/6 to 45/ 32/6 to 60/ • 27/6 to 40/ . 40/ to 60/ 25/ to 40/ 40/ to 60/ 25/ to 30/ 35/ to 50/ 20/ to 35/ 30/ to 45/ 20/ to 30/ 30/ to 35/ 15/ to 22/6 35/ 15/ to 22/6 30/ to 40/ 17/6 to 20/ 30/ 15/ to 22/6 25/ to 40/ 20/ to 27/6 32/6 to 40/ 15/ to 17/6 30/ 17/6 25/ to 30/ 15/ to 17/6 20/ to 30/ 20/ to' 40/

Europe. United States of America. Vessel. France. Germany, Belgium. Vid London. Vid Vancouver. Sailing I team For Pound. Per Pound, i Per Pound. ■&d. togd. Ad, togd. : jjd. to Jd. -&d. to Jd. to Jd. ) 8s. per bale in addition #1 00c. (6s. 7d.) to $1 80c. ) to freight to London (7s. 5d.) per 1001b. i

Article Total sh 'PP ed d U"ng AMlOle. 1896 Freight at New , Freight at Zealand Rates. Victorian Rates. WoolGreasy ... ... ... ... 100,595,3331b. Scoured (including washed and sliped) 28,556,291 „ Frozen meat — Sheep ... ... ... .. 810,016 cwt. ... Lamb ... ... ... ... 255,276 „ Butter ... ... ... ... 71,353 „ Cheese ... ... ... ... 71,372 „ £ £ 261,967 99,548 89,238 | 42,388 415,808 236,255 147,422 74,456 27,471 24,974 20,608 I 24,980 ! £962,514 j £502,601