The New Cunarder.

Press, Volume LXVIII, Issue 20490, 8 March 1932, Page 8

The New Cunarder.

It is announced in a short message from London this morning that construction of the huge Cunard liner, suspended since early in December, will be resumed in April, and without Government assistance; and although this is good news for the 3000 workmen on Clydebank and for thousands more, engaged on supply contracts, it is tempting to read it as something more than a promise of relief in a distressing industrial situation, iri no section, of' industry more distressing than in shipbuilding. At the end of December work in hand amounted to 400,500 tons, including 153,680 , tons under suspended contracts—a little less than at the end of September and considerably IeBS than half of the tonnage uqder construction in December, 1930; and this total, 28.5 per cent, of the world's total, was the lowest since the end of 1887. Obviously, to cease work on a -contract of this size at stich a time was to intensify difficulties already severe; but the company's decision was taken on grounds so strong that it is not likely to have been reversed-—especially without State aid—merely to put platemakers and carpenters back into work, or to renew the challenge to the Bremen and the Euxopa. The fall in the bank rate and the prospect of a further fall is one consideration, of some importance because the company has financed its replacement construction through the bill market and may continue. If it plans to do so, this , will itself tie an encouraging sign, since it will- mean that there is a dear prospect of meeting bills out.of earnings set aside to cover depreciation. The , alternative, of course,' is a long-term loan, which, unless bank rate promises to stabilise at 4 a low level, might be safer; but whatever the financial method resorted to, it is not unreasonable to assume that the Cunard directors regard the future now much more hopefully than in December, when they told their shareholders that the tonnage available for the North Atlantic trade was excessive, that ships in commission were not earning enough to cover depreciation, and that the outlook for this year was grave. Such was the background of the decision to stop what would,have been even in. good times a very bold venture. The. ship had been designed, Mr A. Emil Davies wrote last year in the Week-End Review, "to surpass " in speed, dimensions, and luxury any- " thing hitherto 'built." She was to contain, in addition to the now usual cocktail bars, shops, gymnasiums, and swimming pools, " a " properly consecrated . church, the '•piety of the millionaires who h frequent this class of vessel being " proverbial." The cost wa& to be so high that the Board of Trade had to relieve the London Underwriting Market of £1,780,000 of the total , construction risk of £4,500,000 ; ' and Southampton Docks and the Hudson river were to be deepened to'receive No. 534 arid a sister ship, not yet begun. These two were to do the work of three ships now on the North Atlantic route; but it was easier, perhaps, to set out on this tremendous project, under provocation of. losing the supremacy of the Atlantic, long held by the Mauretania, than to see success and profit ahead when the various shipping lines were being compelled to lay up half their fleets, when balance-sheets showed heavy losses,; and when France and even Italy were preparing to join in—Mr Davies's phrase the insensate competition for the "North Atlantic millionaire traffic, "which is barely sufficient for one

" line," And these new competitors of course would be State-aided. What has happened to the French scheme is not at the moment quite clear. The Compagnie Generale Transatlantique, building the lie de. France, was rescued by a State guaranteed loan o£ 160,000,000 francs, in return for which the State received virtual control of the company; but this aid tfas not enough. In December the Government proposed to raise the guarantee to 300,000,000 francs. On January 22nd it was reported by cable that the Senate's Finance Commission had rejected the proposal; since when no more has been heard. The Cunard Company's announcement, however, denotes either a degree of recklessness quite incredible in the circumstances or a most welcome assurance of better conditions in shipping and in trade generally. It is just possible that it is based partly upon a national shipping agreement, which might do much to strengthen the position of all the major companies now in difficulties.